Switzerland’s largest bank will pay out the second installment of its 2019 dividend, setting a precedent with its decision. Global banking regulators meanwhile have urged for restraint.
Shareholders at a remote general meeting voted with 99.49 percent in favor of proceeding with the payment of the second tranche of the dividend, according to a statement released on Thursday.
The payment will amount to $0.365 per share, the same amount the bank paid in spring.
Reaction to Regulator Concern
UBS is the first big bank in Europe to pay out the entire dividend for last year. Like its rival Credit Suisse (CS), UBS had heeded calls by the regulator in April to show restraint and split the payment in two.
Banks in the U.K. and the European Union followed suit, given the regulators’ concern that widespread credit defaults would potentially unhinge the banking system.
Financial Solidity
Meanwhile, Switzerland’s Finma no longer objects to dividend payments and CS is also planning to pay out the second part of the dividend, while Julius Baer shareholders already accepted the proposal.
Swiss banks in general have a sound understanding of the current risk exposure and financial stability. Both the central bank (SNB), Finma as well as rating agency S&P have established the systems solidity and sustainable profitability.
Regulators at the Bank for International Settlements (BIS) don’t fully agree with the approach taken by the Swiss. They have urged European banks to remain vigilant. Bank of England also has refrained from looking into the question of dividend payments.
