No bank dividends for investors in next recession

We don’t think Australian bank shareholders are cognisant of the risk that if equity capital ratios fall modestly, there are new automatic restrictions imposed by the regulator on the distribution of earnings that mean dividends may not be paid.  In fact, it is likely that some banks will stop paying dividends altogether in the next recession as they rebuild capital eroded by loan losses.  Continue reading “No bank dividends for investors in next recession”