COVID-19 Forces Banks to Suspend Distribution of Dividends

The Bank of Jamaica (BOJ) has asked deposit-taking institutions, mainly banks, not to pay out dividends in any manner for the financial year 2020 until further notice.

The Central Bank, in a release Friday afternoon, April 24, said it was taking this step although there were no liquidity problems of the deposit-taking institutions in the country.

In its release, the Bank said “after consultation with the boards of financial holding company (FHC) designates, [the BOJ] wishes to confirm the mutual understanding that FHC designates and deposit-taking institutions  will suspend the distribution of profits by way of declaring dividends  in any manner (cash or stock) for the 2020financial year, until further notice.” The Bank said it also has an understanding that the institutions “will similarly postpone the distribution of any unpaid dividends declared for the 2019 financial year.’

In a radio interview, BOJ Governor Richard Byles said the matter will be reviewed in the next few months but there was no immediate set time when the suspension would end.

The BOJ release stressed that “the fundamentals of the Jamaican financial system continue to be strong.”

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