JOHANNESBURG (miningweekly.com) – Africa’s biggest bank by assets, Standard Bank Group, said on Tuesday that it had noted the contents of the guidance of the Prudential Authority of the South African Reserve Bank (SARB) on dividend distributions to ordinary shareholders.

SARB’s Prudential Authority, headed by Kuben Naidoo, has recommended that banks hold back on dividend distribution and executive bonuses to preserve capital for continued lending to those impacted by the national coronavirus lockdown.

Standard Bank, headed by CEO Sim Tshabalala, stated in a stock exchange news service (SENS) announcement that, in particular, note had been taken of the Prudential Authority’s expectation that no distribution of dividends on ordinary shares and no payments of cash bonuses to executive officers and material risk takers should take place in 2020.

Standard Bank stated that its group management and board of directors would consider the guidance of the Prudential Authority and advise shareholders accordingly in due course.

The nonbinding recommendation of the Prudential Authority follows SARB’s permission for banks to access an additional portion of their regulatory capital reserves to support efforts to lessen the economic impact of the Covid-19 lockdown order on South Africa.

Standard Bank stated that its board fully recognised the importance of dividends to the group’s owners. However, it also recognised the need to support households and businesses amid the Covid-19 pandemic as well as the  importance of ensuring the stability of the group in the short-, medium- and long-term.

Standard Bank stated that it remained well capitalised and liquid.

As reported by Mining Weekly last week, the bank is benefitting from building up increased capital levels over the last few years in line with Basel requirements.

As at December 31, the group had a total capital adequacy ratio of 16.7% and R427-billion worth of contingent liquidity.

Capital and liquidity requirements across all the markets in which it operates are continuing to be met, Standard Bank Group FD Dr Arno Daehnke said during an investor call.

The bank’s small-enterprise, low-income and student clients will be benefitting from an automatic three-month payment holiday from April 1 to June 30, equating to approximately R35-billion, Daehnke disclosed.

“I’m confident that Standard Bank is taking all the appropriate steps to maintain business continuity in order to continue to serve our clients across all the markets in which we operate.

“The private sector has a vital role to play in supporting the government and doing what we can to contain the spread of Covid-19 and we must all play our part to protect the most vulnerable in our society,” Tshabalala said during the investor call.

As part of its 2019 results announcement, the Standard Bank board approved a final dividend of 540c a share.

Daehnken concluded last week’s investor call by committing to provide the markets with its normal first-quarter updates via SENS in late April.