The Clap
The Central Bank of Egypt is exploring having banks not distribute dividends to shareholders during 2023, according to sources.
What
This decision aims to safeguard banks’ capacity to absorb losses & lend to support the economy.
So What
Dividend halts may affect dividend yield averages in the banking industry negatively, & investors may consider such halts as a risk factor when making an investment decision.
Now What
The decision will depend on each bank’s financial solvency (ability to pay obligations on time). Banks with high financial solvency will reduce the value of their dividends, while banks with weak financial solvency will not distribute dividends at all.
