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Well-capitalized banks are a prerequisite for banks to be able to cover large losses and continue to lend to businesses and households. Therefore, it is important that they withhold excess funds now, the Finance Ministry writes in a press release.
Finance Minister Jan Tore Sanner (H) points out that there is still great uncertainty about the future development of the corona pandemic. The virus outbreak has caused the strongest setback to the Norwegian and international economy in many decades.
Still a big risk
There is still a risk that economic development will be weaker than expected, for example in case of new major outbreaks.
Although in recent months we have seen signs of an increase in the Norwegian and international economy, the danger is far from over. Therefore, I assume that Norwegian banks will wait to distribute dividends or buy back shares until the uncertainty is further reduced, says Sanner.
The Finance Minister’s call for Norwegian banks comes about a month and a half after the European Central Bank came out and asked the banks of the 19 euro countries to wait to pay dividends or bonuses before January next year.
Will not prohibit
Also in March this year, Sanner appealed to banks and insurance companies to refrain from paying dividends and bonuses. He then received criticism from Rødt for not prohibiting them from distributing dividends during the past year, as Finanstilsynet suggested in a letter to the ministry.
This time, it is true that insurance companies are being asked to “base their profit allocation on thorough analyzes of their own creditworthiness,” but they are not covered by Sanner’s request to wait to pay dividends.
