Report on global dividends to near pre-pandemic levels in 2021

MILAN, Aug. 23 (Reuters) – Global dividends are expected to rise to $ 1.39 trillion this year, slightly compared to the previous estimate to reflect a stronger-than-expected recovery in US payments. company, Janus Henderson said in a report released Monday.

Its most recent estimate, an increase of 2.2 percentage points from a previous one, is only 3% below the pre-pandemic peak.

Dividends, a payment by the company to shareholders, fell last year in the context of the COVID crisis, as they weighed on regulatory constraints and government pressure to restrict payments.

But there is currently a strong recovery, with overall growth of 26.3% in the second quarter, according to data from the investment manager’s global dividend index.

Underlying growth, adjusted for special dividends, changes in currency, temporary effects and changes in the index, was 11.2%. In year-on-year terms, growth from 2021 to 10.7% is expected, equivalent to an underlying rise of 8.5%.

Dividends from companies that restarted payments amounted to $ 33.3 billion and accounted for three-quarters of the underlying growth in the second quarter, according to the report.

“Global dividends as a whole are likely to pick up pre-pandemic levels in the next 12 months,” Jane Shoemake, client portfolio manager for Janus Henderson’s global equity income team, said in a statement.

“The current recovery will not be hampered by a weak banking system as it was after the global financial crisis of a decade ago,” as policymakers continue to provide fiscal and monetary support to the economy, he added.

Bank dividend limits had a significant impact in 2020, as lenders accounted for half of the fall in global payments, but since then limitations have been reduced.

In early August, European banks announced billions of euros in payments to shareholders. Among them, ING Groep NV (INGA.AS) and Intesa Sanpaolo (ISP.MI), whose dividend on account will be the subject of discussions with regulators.

Meanwhile, European Union banks have benefited from strong performance in stress tests by the region’s banking watchdog.

Among British banks, HSBC (HSBA.L) reinstated dividend payments that marked the highest payments in the future, after the Bank of England dismissed its remaining pandemic limits in mid-July.

Europe records a solid rebound after a wave of cancellations and suspensions last year.

At the same time, companies continued to pay during the first year of the pandemic in the United States and Canada, according to the Janus Henderson report.

Rising commodity prices boosted payments by mining companies, with discretionary recovery from industrialists and consumers, the report also showed.

Defensive sectors, such as telecommunications, food, food retail, household products, tobacco and pharmaceuticals, recorded single-digit growth rates.

Report by Stefano Rebaudo Edited by Mark Heinrich

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