Regulatory Alerts2022-03-10
G2/2022 - Dividends and Bonus Payments in Response to COVID-19
The Prudential Authority issued Guidance Note 2/2022 to direct South African banks on maintaining prudent dividend distributions and cash bonus payments for executives and material risk takers amid the ongoing COVID-19 pandemic. Banks must carefully evaluate payout ratios against current and projected capital adequacy, profitability metrics, and internal risk appetite to preserve sufficient buffers for absorbing economic losses. This directive requires boards and shareholders to prioritize long-term financial soundness and real-economy funding when approving 2022 distributions, effectively superseding prior relief measures while preserving capital conservation requirements.
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