Banks are jumping 2.7% against the background of an intention to distribute dividends. According to various reports, the regulator is expected to allow the distribution of dividends in banks at a relatively high rate. Recall that banks are already distributing dividends but at a relatively low rate and against the background of an improvement in the reserve margins and equity they need to put up, theoretically they have the freedom to distribute a higher dividend. Not sure it will be so fast and so so great, but it is definitely a viable option.
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In an interview with Bloomberg, the Supervisor of Banks, Yair Avidan, said that “each case will be examined on its own merits. We are still discussing the issue because of the uncertainty. In the optimistic scenario I can assume that in the second half of 2021 banks will be able to start paying dividends again.” However, the Supervisor of Banks does not expect banks to return immediately to the same dividend levels as before the corona outbreak, but they may approach that in 2022.
As a result,
Tel Aviv Banks Index -5
+ 1.39%
Base:2,114.74
opening:2,121.69
High:2,193.9
low:2,116.22
change:224,838,989
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Jumps 2.7%.
Working
+ 1.39%
Base:2,305
opening:2,317
High:2,395
low:2,307
change:66,267,429
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Jumps by 2.6%
national
+ 1.61%
Base:1,985
opening:1,985
High:2,060
low:1,980
change:62,073,070
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Jumps 2.5%,
Mizrahi Bank
+ 2.15%
Base:7,689
opening:7,719
High:8,009
low:7,686
change:26,245,319
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Jumps 3.4%,
Discount
+ 1.2%
Base:1,252
opening:1,260
High:1,301
low:1,252
change:48,004,131
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Climbs 2.8%, international rises 2.1%,
Phoebe
+ 1.66%
Base:9,482
opening:9,482
High:9,800
low:9,476
change:3,625,008
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Increases by 1.7%
One way or another, bank shares soared by about 50% from the low of five months ago, And they repaid most of the decline resulting from the corona crisis. The question is where do we go from here? Well, the most important thing is the credit provision clause (the scope of the provision for credit losses). The big question is whether the spending rate will increase or will actually decrease. After all, the economy is not in a dismal state and seeing positive signs, especially when looking ahead to the coming months. Against this background, there may even be recurrences as early as next quarter, so by the way, is happening in US banks.
Bank shares may greatly benefit from a return to routine. If Israel is indeed one of the first (and even the first) to return to routine, thanks to the high rate of vaccinators, then the world may direct funds to investments in Israel, which is emerging from the crisis impressively; Then the banks are the right method and way for them. As has happened in the past – the exposure of foreigners to Israel is mainly through the banks that express the situation in the local economy.
It will be recalled that following the Corona crisis, banks were banned from distributing dividends at least until March 2021. At the same time, the Bank of Israel decided to allow banks to ease their capital adequacy by agreeing that they would not use these facilities to repurchase shares or distribute dividends. It now appears that the Bank of Israel will gradually lift the ban and allow them to return to the policy of dividend distribution.
This also seems to be the trend in the world. In the US, the Federal Reserve has authorized banks to repurchase billions of billions of dollars, and last December European regulators set strict limits on payments to shareholders, but the decision also means lifting the de facto ban on dividend distribution.
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To the moon
Diamon hands
15/02/2021 14:36
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1.
Banks did not repay most of the decline from the corona crisis
Omar
15/02/2021 14:34
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1Since I purchased an ETF that tracks the banks index before the corona crisis and have left it so far I am sure the reporter is wrong and misleading. Bank shares returned close to 50 percent of the loss but are well over ten percent off pre-March value
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