ECB’s Bank Payout Decision Complicated by Worsening Pandemic

European banking regulators, who had been moving closer to lifting a de-facto ban on dividends, are now increasingly worried about the worsening economic outlook and its impact on lenders’ balance sheets because of the resurgent coronavirus.

As banks press regulators to reinstate dividends, one compromise option being considered by officials is allowing stronger banks to pay a dividend but limit the amount of annual profit they can pay out, according to people with knowledge of the matter. The uncertain outlook caused by the pandemic could still sway officials gathered at the European Central Bank toward extending the ban, the people said, asking not to be identified as the matter is private.