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Restrictions on bank dividend payments extended but relaxed

Ljubljana, 12 February (STA) - The Slovenian central bank has extended until the end of September a requirement that banks may not pay out dividends, but the ban is not complete as a portion of profits may be distributed under certain condition.

In a macroprudential decision issued on Friday, Banka Slovenije said limits on dividends, purchase of own stock or use of profit for other purposes would remain binding.

However, if a bank posts profit in the first quarter of 2021, it will be able to pay out up to 15% of profit generated in 2019 and 2020, or 0.2% of common equity tier 1 capital, whichever is lower.

Additionally, suspension of variable pay to employees is no longer mandatory but merely recommended, which means prior notification to the regulator of any such payments is required.

The central bank said this measure follows the recommendation of the European Central Bank and the European Systemic Risk Board while "taking into consideration the specificity of our bank system."

Slovenian banks are in relatively good shape at present and in the first eleven months of last year they generated a cumulative pre-tax profit of EUR 471 million.

However, this figure is down a fifth year-on-year and would have been even lower were it not for the one-off effect of the NKBM-Abanka merger.

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