Four out of UK’s five biggest banks fought to maintain dividends against wishes of Bank of England

Four out of UK’s five biggest banks fought to maintain dividends against wishes of Bank of England

Four out of the UK’s five biggest banks fought to maintain their dividends against the wishes of the Bank of England. 

On Tuesday HSBC, Barclays, RBS, Lloyds and Standard Chartered said £7.5 billion of shareholder handouts would be cancelled to protect cash reserves. 

But bosses at all of the lenders, except taxpayer-owned RBS, initially baulked at the idea, and only made the announcement after heated phone calls with the Bank’s deputy governor Sam Woods. 

Under pressure: Bosses at all of the lenders, except taxpayer-owned RBS, initially baulked at the idea of cancelling dividend payouts

One senior banking source claimed that without this, lenders would have left themselves open to a shareholder revolt. 

The Bank has also called on banks to scrap bonuses, placing more pressure on senior bosses. 

Banks have also been criticised for failing to pay out emergency Government-backed loans to small businesses. Business Secretary Alok Sharma said it was ‘unacceptable’ they were withholding vital cash. 

  • Insurance group Legal & General has promised to pay its dividend despite difficult trading during the crisis. The decision flies in the face of guidance from EU regulator Eiopa.

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