Israeli banks generally distribute 40% of their quarterly profits, but this percentage is again expected to be cut in half.
Banks will not return to distributing profits according to their usual profit distribution policies, and will once again be content with distributing reduced profits. Superintendent of Banks Daniil Hahiachvili sent a letter today to bank heads asking them to consider the consequences of the security situation in determining their profits. So, while banks typically distribute 40% of their quarterly profits on average, they are expected to maintain their dividends at 20% of profits for the second consecutive quarter.
“The current geopolitical situation makes it necessary to conduct a constant conservative and rational examination of capital planning, dividend policy, and share buybacks, taking into account the actual capital ratios and capital cushions required in various possible scenarios,” Hahiashvili writes. “Alongside the uncertainty in our region, the banking system continues to demonstrate financial strength,” he adds.
Published by Globes, Israel Business News – en.globes.co.il – on May 16, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
Banking Supervisor Daniel Hahiashvili Credit: Eyal Yizhar, Shlomi Yosef Processing: Tali Bogdanovsky