PHILIPSBURG--As of March 21, financial institutions may once again submit approval requests for dividend payment for the financial year 2022.
The Central Bank of Curaçao and St. Maarten (CBCS) has decided to revoke the suspension of dividend distributions, given the recent developments of the COVID-19 pandemic, while considering the resilience of the financial institutions and the projected outlook.
In April 2020, CBCS announced a temporary suspension of dividend distributions for financial institutions, by which CBCS actively steered financial institutions towards creating additional buffers to withstand the impact of the COVID-19 pandemic on the financial sector, CBCS said in a press release on Monday.
CBCS informed the financial sector was that institutions – in addition to self-implemented measures – were to suspend dividend payments until further notice. Adding the profits to the reserves is regarded as an effective way for institutions to enlarge their buffers.
The purpose of this measure was to create precautionary additional buffers, as the duration and impact of the COVID-19 crisis on the financial sector were still uncertain. CBCS also aimed to respond, as far as possible, to the dynamic course of the COVID-19 pandemic.
The recent developments regarding the pandemic seem to provide some breathing space for the economy, aimed at helping repair the economic damage brought about in 2020 and 2021.
CBCS will assess all requests for dividend payment for the financial year 2022 on an individual basis. As in the past, approval of a request will be subject to the risk profile of the institution and its capital, solvability and liquidity after dividend payment, among other things.
