Reuters
Shareholder payouts at risk as ECB tells banks to hold capital – sources
Investors hoping for fat payouts from euro zone banks may be disappointed as supervisors are urging them to preserve capital in the face of a souring economic outlook, sources told Reuters. Banks including UniCredit and Societe Generale have been reporting bumper profits and announcing dividends and share buybacks, boosted by a sharp increase in interest rates and a trading boom after more than a decade of mostly meagre returns. But with the euro zone now heading for recession and supervisors urging caution, bankers will likely find it harder to reward shareholders as generously next year, as their capital buffers may be smaller than they expect now, the three supervisory sources said.