Bloomberg: Turkey advises commercial banks not to distribute dividends in 2021

Turkey’s banking regulator has advised commercial banks not to distribute dividends from profits in 2021, when a currency collapse eroded banks’ cash reserves, Bloomberg News Agency quoted informed sources as saying.

According to the report, the sources said the regulator had passed its recommendation to the banks through the Turkish Banking Association. Now, the banks are waiting for an official written notice prohibiting dividend payments.

The Banking Regulatory Authority and the Banking Association declined to comment on this to Bloomberg, the report also said.

In Turkey, banks were allowed to pay out up to 10 per cent of their net income in dividends last year due to the successful management of risks during the pandemic.

In 2021, the jumps in inflation and losses in the value of the Turkish currency, the lira, have led opposition parties and the public to attack the government’s economic policy.

READ: Turkey’s economic problems can be resolved with justice: Opposition leader

Meanwhile, last December, President Erdogan said Turkey will never leave its political and economic future to the “prescriptions” of global economic institutions like the IMF.

The Turkish President also urged calm among the public, asking them “not to stray from common sense” when buying foreign currency, setting prices and shopping.

Erdogan also promised additional measures to help low-income citizens.