(Bloomberg) ECB President Christine Lagarde expects restrictions on dividend payouts and share buybacks imposed on European banks to end in September.
Lagarde’s statement signals a return to normalcy that could boost returns for shareholders affected by the cap.
Lagarde says the restrictions will be removed if conditions in the economic and financial sectors do not worsen materially.
A de facto ban on shareholder returns affected European bank stocks last year, with ECB capping dividends and share buybacks for the first nine months of this year.
Analysts led by JPMorgan do not expect banks to resume “free for all” payouts given the unwinding of stimulus and uncertainty of full economic reopening.
Euro Stoxx Banks Index gains +1.53% on the news, EURUSD is up +0.19%.
