Czech central bank to let banks pay out part of accumulated dividends

PRAGUE: The Czech National Bank will allow banks to pay out part of accumulated dividends, Governor Jiri Rusnok was quoted as saying on Monday.

The central bank has urged banks not to pay out dividends as the whole economy was dealing with the impact of the COVID-19 pandemic. With the epidemic abating, the room for dividends had opened.

"We kept certain limits, and we told the banks now that we have a certain scheme under which we will accept them paying out part of the dividends accumulated in their retained profits," Rusnok told the Pravo newspaper.

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The major banks operating in the country are controlled by foreign companies - Austria's Erste and Raiffeisenbank, Belgium's KBC, and France's Societe Generale.

Rusnok said that the dividends would differ among the banks.

"We evaluate (each bank's) risk situation, its capital and based on that, and according to a scheme and rules which the banks know, we determine how much they can take from the retained profits," Rusnok told the paper.

In 2019, companies in the Czech Republic sent abroad 330.6 billion crowns worth of dividends. The amount dropped to 190.3 billion crowns last year as the pandemic hit.