Italian banks may omit or cut their dividends on 2011 earnings after the Bank of Italy urged the nation’s lenders to be prudent about their payout policies in order to protect capital.
“Italian banks must adopt dividend policies that allow them to keep an adequate capital level,” the Italian central bank wrote in a letter to banks March 2. Banks will announce their dividend policies in the next three weeks.
Intesa Sanpaolo SpA, Italy’s second biggest bank, may cut its dividend by 1.4 cents to 6.6 cents per share, according to the average estimate of 24 analysts surveyed by Bloomberg. UniCredit SpA, the country’s biggest lender, has already announced that it will not pay a dividend, after raising 7.5 billion euros ($10 billion) in a rights offer earlier this year.
“We have a bearish stance on dividends of Italian banks,” Fabrizio Bernardi, a Milan-based analyst at Fidentiis Equities wrote in a note yesterday. “Banks might easily avoid any internal debate about their dividends, simply reckoning that there is a huge pot of goodwill to be written down, which would hardly leave room for any dividend,” he said.
Following is a table of the analysts’ estimates and the year-earlier dividends. The figures are in euros.
Number of 2011 Exp 2010 Earnings Analysts Dividend* Dividend Date UniCredit 28 0 0.03 March 28 Intesa Sanpaolo 24 0.066 0.08 March 15 Monte Paschi 20 0.005 0.0245 March 28 Banco Popolare 18 0.014 0.03 March 20 UBI Banca 17 0.081 0.15 March 27 Pop. Milano 14 0.005 0.10 March 27 Pop. Emilia Rom. 7 0.13 0.18 March 13 *Average