Israel’s banking regulator extended until the end of the year a temporary provision. This will allow the banks to resume paying dividends. All these is because of the pandemic situation, and the country is under recovery right now.
The Bank of Israel maintained its advisory to cap dividends at 30% of 2020 and 2021 profits. A higher figure at this time would not be considered prudent and conservative capital setting as per the statement. Last year, when this global pandemic started, the central bank instructed lenders to suspend dividend distribution and share buy-backs. For the limited dividend payments to resume, it gave the go-ahead two months ago.
A three-month extension of the dividends policy has been announced. This is through Dec. 31. The bank noted that there is increasing trend of recovery from the COVID and also there is great improvement in the Israel’s banking system. But according to the bank’s statement the discussions on dividend distributions should still take into account the level of uncertainty regarding the continuation of the pandemic and its future economic implications.
