By Pietro Lombardi 
 

BNP Paribas SA has decided to cancel its 2019 dividend following a recommendation from the European Central Bank.

France's largest-listed bank by assets will propose to allocate the amount that had been earmarked for dividends to reserve, it said late Thursday.

BNP is the latest among France's biggest banks to take this step. Credit Agricole SA and Societe Generale SA canceled dividends after the ECB asked the region's banks not to pay dividends or buy back shares during the coronavirus pandemic.

The ECB wants banks to boost their ability to absorb losses and support the economy as the eurozone braces for a sharp economic slowdown caused by the pandemic. For this reason, it asked banks not to pay dividends for 2019 and 2020 at least until Oct. 1, adding that lenders should also avoid buybacks.

"After Oct.1 and subject to the then prevailing circumstances, the board of directors may convene a general meeting in order to proceed with a distribution of reserves to shareholders in place of the dividend," the bank said.

BNP had proposed a dividend of 3.10 euros ($3.38) a share. It confirmed the general meeting scheduled for May 19, which will take place without in-person presence of shareholders.

 

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

 

(END) Dow Jones Newswires

April 03, 2020 01:32 ET (05:32 GMT)

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