NBM DOES NOT RECOMMEND BANKS TO REPAY DIVIDENDS DURING BANKING SYSTEM REFORM

National Bank of Moldova Vice President Ion Sturzu announced that the regulator does not recommend Moldovan banks to repay dividends to shareholders within the period of banking system reforming and Moldovan banks strengthening.

“The banking business should be available to the people or organizations with quite large capital, in order that shareholders not to demand repayment of dividends each year”, the banker said.

He reminded that in 2017, the NBM recommended to bank shareholders not to repay dividends, as the demands on capital adequacy should be correctly calculated on the basis of the Basel-III norms and results of complex inspections by the regulator for crediting to connected persons.

“The banking business is quite specific. The return in it does not come automatically within a year. Today, the modernization demands large investments in IT, payment system, risk system, new specialists. The return from such investments may come only in three, five or even more years”, Sturzu said, maintaining that banks should have shareholders who are ready at any moment to raise its capital.

The bank Deputy President said that for regulator, an important issue at paying dividends is the reputation and transparency of bank shareholders.

“It will be difficult for us to decide to pay dividends is for example we do not know to whom the money go and what we have to expect from such shareholders”, the banker said.

According to him, the NBM first of all is interested in bank’s purity and transparency, how it observes norms and regulations.

“For us it is very important that the bank to be able to prove that it is stable in all scenarios and stress tests. In such case the payment of dividends does not raise any questions”, NBM Vice President Ion Sturzu said.