MILAN (Reuters) – Italy’s biggest bank, UniCredit (MI:CRDI), said on Sunday it was putting on hold plans to pay dividends on 2019 results and to buy back shares to meet regulatory calls to preserve capital to support the economy against the coronavirus.
The European Central Bank told euro zone banks on Friday to skip dividend payments and share buybacks until the start of October at the earliest and use profits instead to boost capital and their ability to withstand losses and to lend.
UniCredit said it was withdrawing a proposal to shareholders, who are due to meet on April 9, to approve a dividend of 63 euro cents per share and authorize a share buyback for up to 467 million euros ($520 million).
The bank said it reserved the right to submit again to shareholders the same proposals after Oct. 1 depending on the ECB review of its recommendation.
The bank’s core capital is set to rise by 0.37 percentage point following the decision not to distribute part of last year’s profits as dividends, it said.