Following the recommendation of the European Central Bank to the Significant Credit Institutions and the National Competent Authorities dated 27 March 2020, in respect to dividend distributions and share buy-backs during the COVID-19 pandemic, the Central Bank of Cyprus (CBC) issued a new circular on 6 April 2020 addressing the Less Significant Credit Institutions (LSCIs) who are operating in the Republic of Cyprus.
The CBC recommends all LSCIs, until 1 October 2020, refrain from:
- any dividend distribution
- issuance of irrevocable commitments to pay out dividends for the financial years 2019 and 2020
- any own share buy-backs aimed at remunerating shareholders
CBC emphasises that LSCIs which are not in a position to comply with the above recommendations should promptly provide the reasons for non-compliance to CBC.
For further analysis on the effects of the COVID-19 pandemic on the banking sector and credit acquiring companies can be found in our article here.
The announcement of the CBC dated 6 April 2020 can be found here (only available in Greek).
The recommendation of the European Central Bank dated 27 March 2020 on dividend distribution during the COVID-19 pandemic can be found here.
If you have any questions, please contact George Apostolou or your usual Harneys contact.