Investors want bank dividends restored this year
Our research reveals private investors’ views on bank dividends and executive pay.
16th February 2021 11:15
by Jemma Jackson from interactive investor
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Our research reveals private investors’ views on bank dividends and executive pay.
A poll of 2,752 website visitors to interactive investor, the UK’s second-largest direct to consumer investment platform, suggests that more than half would like to see a return to dividends.
This comes at a time when many banks have had time to shore up their balance sheets and capital buffers in a way which places them in their strongest period for over a decade.
The big warning shot into bank board rooms, however, is on executive pay. A staggering 89% said they would vote down excessive remuneration for bank executives at AGMs, based on events over the past year. Only 11% claimed they wouldn’t vote against excessive remuneration.
Key findings
While 65% of those polled said they didn’t buy banks shares for their income, 35% did. Whatever their reasons for buying bank shares, 53% said bank dividends should be restored this year: 25% because they had bought the shares in anticipation of this, and 28% because they thought banks owe it to their shareholders.
Yet almost half of respondents (47%) said dividends were not a priority, citing more interest in the long-term value of the shares and capital adequacy requirements.
Richard Wilson, CEO of interactive investor, says: “This poll shows that private investors are sensible stewards, prepared to take a long-term approach to value creation. The overwhelming view against excessive pay reflects an incredibly difficult year for many people and the banks, plus other UK plcs, should respond with empathy and caution. We hope our investors will continue to engage with the companies they invest in, and make their opinions known by participating in corporate votes.”
Richard Hunter, Head of Markets, interactive investor,says:“Since the great financial crisis of 2008, bank stocks have tended to veer into trading stocks territory as opposed to the long-term investments traditionally seen, amid much heightened volatility.
“Even so, the banks have had time to shore up their balance sheets and capital buffers in a way which places them in their strongest period for over a decade.”
The website poll was conducted between 11-15 February 2021.
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