May 23, 2019 / 2:11 PM / 3 months ago

Czech buffer rate increase may limit room for dividends -association

PRAGUE, May 23 (Reuters) - The Czech banks may have less room for paying out dividends after the central bank’s decision to increase the countercyclical buffer again, the Czech Banking Association said on Thursday.

“Compared to the end of 2018, the regulatory requirement on the banking sector will rise by one percentage point over 2019 and 2020,” the association said.

“We estimate that this could mean that the banks will have to put aside up to tens of billions of crowns to increase their capital reserves, which will limit space for dividend payouts.”

The Czech National Bank (CNB) on Thursday raised the countercyclical capital buffer (CCB) for banks’ capital reserves by 25 basis points to 2.00%, lifting the rate for the sixth and what could be the final time. (Reporting by Jason Hovet and Robert Muller)

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