Banks facing further dividend woe nest year

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Bank of England warns British lenders could be forced to cancel dividends again next year as they are battered by coronavirus pandemic

By Daily Mail City & Finance Reporter

Published: | Updated:

British lenders could be forced to cancel dividends again next year as they are battered by the Covid-19 pandemic, the Bank of England has warned. 

As Barclays, Lloyds and Natwest prepare to update investors on their finances, the central bank will assess whether to extend a suspension on shareholder payouts beyond the end of the year. 

Uncertainty: The Bank of England will assess whether to extend a suspension on shareholder payouts beyond the end of the year because of coronavirus

Under pressure from the Bank, UK lenders agreed in March to suspend dividends this year to preserve cash to help companies and households hit by the virus outbreak. Bonuses to senior staff were also scrapped. 

The Bank will look again at dividends in the fourth quarter of this year. 

The update came as Virgin Money put aside another £42m to cover mortgages and loans turning sour. It now has £584m set aside. 

Barclays updates the market on its plans today, followed by Lloyds tomorrow and Natwest on Friday.

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