The Banking Regulation and Supervision Agency (BDDK) sent an official notice to the Turkish Banks Association (TBB) and the Turkish Participation Bank Association (TKBB) to retain a cautious stance while distributing dividends for 2010 to shareholders and instead keep the profits as contingency reserves, given that the dark clouds over the financial system have not yet dispersed completely.
The BDDK statement included the warning that “if you are planning to distribute dividends from your profits in 2010 or from previous years, you have to get permission from the BDDK first.”
Along the same lines, BDDK approval is now necessary for bonus payments and additional perks to personnel, both of which demand extra attention, the statement read. Speaking anonymously to Today’s Zaman to assess the BDDK’s announcement, a banker said BDDK’s action must be evaluated from the point of view of the expectations that bank profits are doomed to drop in the coming year in line with falling interest rates and profit spreads.
A recent report by the BDDK, titled “The General Outlook of the Turkish Banking Sector – September 2010,” showed that the net profits rates continued to be on the upswing in 2010 as of the end of the third quarter, registering a 7.4 percent rise to reach TL 16.88 billion. A total of 54.5 percent of the stated profits were recorded by the domestic private conventional banks while profits from public banks accounted for 29.9 percent of the total figure. The foreign conventional banks had a share of 8.6 percent of the combined profit figure and the remaining 3.3 percent belonged to the participation and development banks.
Source : http://www.todayszaman.com/news-228217-banks-not-to-distribute-dividends-without-prior-permission.html - Nov 29, 2010 |
