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Financials

Bank Leumi freezes dividend, share buybacks during coronavirus crisis

TEL AVIV, April 16 (Reuters) - Israel’s Bank Leumi said on Thursday it was suspending dividend payouts and share buybacks amid financial uncertainty during the coronavirus crisis.

Leumi, one of Israel’s two largest banks, also said it would reduce its Tier 1 capital ratio to 9.5% from 10.5%.

Smaller rivals Mizrahi Tefahot and Israel Discount Bank have taken similar measures.

Last month, Israel’s banking regulator lowered the capital requirements of the commercial banks by one percentage point in order to help them provide more credit to households and the business sector.

The Bank of Israel’s Banking Supervision Department also instructed banks to re-examine their dividend distribution and share buyback policies for the same reason.

The new capital requirements are in effect for six months and can be extended for another six months, after which banks will be required to gradually rebuild their capital over two years. (Reporting by Steven Scheer; Editing by Tova Cohen)

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