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(Reuters) – UK regulators are considering plans to allow banks to start paying dividends again next year, The Times newspaper reported on Monday.

The Bank of England (BoE) and commercial banks are “bartering” a deal to allow banks to make shareholder payouts as long as their loss-absorbing capital buffers are strong and they continue to extend credit to the real economy, the newspaper said.

Under a plan being considered, the regulator will end its dividend ban for as long as capital ratios do not drop below an agreed floor and net lending continues to rise, according to the report.

The Bank of England did not immediately respond to a request for comment.

Late in July, BoE had said it will assess whether to extend a suspension on payouts such as dividends and share buybacks by banks beyond the end of the year due to the COVID-19 pandemic.

Under pressure from the central bank, Britain’s lenders agreed in March to suspend payouts this year in order to preserve capital to help companies and households hit by COVID-19 lockdowns. Bonuses to senior staff were also scrapped.

The central bank had said in July that its Prudential (LON:PRU) Regulation Authority (PRA) would undertake in the fourth quarter an assessment of distribution plans at banks beyond the end of 2020.

Source : https://.investing.com/

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