FIN-FSA Extends Recommendation on Suspension of Profit Distribution
FIN-FSA has extended the validity of its recommendation on suspension of dividend or profit distribution until January 01, 2021, in response to the COVID-19 pandemic. FIN-FSA also clarified that credit institutions are expected to continue to use their capital and liquidity buffers for lending purposes and loss absorption amid COVID-19 pandemic. FIN-FSA recommends that the credit institutions under its supervision exercise great caution when deciding on variable remuneration in situations where remuneration could lead to a deterioration of the institution's capital adequacy position.
Based on the recommendations of ECB and ESRB, FIN-FSA has extended the validity of the recommendation, issued in March 2020, on suspension of dividend or profit distribution. The recommendation also applies to repurchases and redemptions of shares when the purpose of the purchases and redemptions is to distribute profits. Also, there are no changes to the recommendations made to insurance companies by FIN-FSA, in April 2020, to refrain from profit distribution and payment of variable remuneration.
Related Link: Notification
Keywords: Europe, Finland, Banking, COVID-19, Dividend Distribution, Remuneration, Regulatory Capital, ECB, ESRB, FIN-FSA
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