Rothschild warns of financial hit from coronavirus and halts dividend
Historic bank Rothschild & Co has said it won’t propose a dividend at its 2019 annual general meeting, and warned that the coronavirus pandemic will hit its results as the virus batters businesses and markets across the world.
Rothschild said it would pay out the planned €0.85 per share for 2019 “when appropriate”, but became the first major French lender to bow to pressure from the European Central Bank (ECB) to suspend dividends during the crisis.
In an update this morning, the private bank and asset manager said there was still “considerable uncertainty” over how the outbreak would develop and the degree to which it would impact its 2020 results, but said it was clear it would have a “materially detrimental” effect.
The ECB has urged lenders to show restraint on bonuses and dividends until October in order to preserve capital and maximise lending amid the economic downturn caused by coronavirus.
By yesterday afternoon, half of the eurozone’s largest lenders including ING, Rabobank and Unicredit had announced plans to delay, review or scrap dividends, according to Bloomberg.
“The group has implemented its business continuity plans for all of its activities which are functioning well,” said Rothschild, which was founded by Mayer Amschel Rothschild in the 18th century.
“We are confident that we will see a strong improvement in performance once markets start to return to a more normal situation,” it added.
Rothschild’s shares rose as much as 3.3 per cent in morning trading in Paris.