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16 December 2020 By Liam Proud Follow @liamwardproud

The regulator capped payouts as a proportion of earnings and assets. Well-capitalised lenders with richer valuations, like Nordea and KBC, now offer tiny yields compared with minnows like Liberbank. The risk is that a slow recovery causes restrictions to last beyond September.

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The European Central Bank on Dec. 15 said it would ease dividend restrictions on the lenders it supervises.

It recommended that banks exercise “extreme prudence” and consider not returning any capital to shareholders. But the regulator also said that dividends and share buybacks should remain below the lower of 20 basis points of common equity Tier 1 capital and 15% of aggregate earnings in 2019 and 2020.

The Euro STOXX Banks Index was down 0.1% at 0830 GMT on Dec. 16, compared with a 0.9% rise for the broader STOXX Europe 600 Index.

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