In June, the European Systemic Risk Board (ESBR) published a recommendation to national authorities to ask banks to refrain from distributing surplus funds at least until January 1 2021. Norwegian authorities did not go that far in their statement, and rather stated that the capacity to distribute dividends should be linked to the development in the economy. This is thus an expectation to limit dividend distribution within the scope of the European recommendation, and is not stricter.
Norwegian banks are among the most solid in Europe, and have delivered positive results throughout the challenging period. Norwegian banks have shown that they act responsibly.
The Norwegian economy is improving, unemployment is falling and capacity utilization is increasing. The economy is showing sings of reduced uncertainty. Norwegian banks have complied with the recommendations from the authorities, and have significantly reduced their dividend payments. Several banks have postponed their decision until the autumn. Distribution of dividends so far this year is clearly lower compared to a normal situation, which confirms that banks have acted responsibly in the current situation.
It is positive that the Ministry of Finance in its statement provides support to the insurance companies to base their distribution policy on thorough analyzes of their own solvency position. Norwegian financial institutions are solid and very conscious of their important role in society dealing with the challenges ahead of us.