The Financial Post reports in its Tuesday edition that Canada's six largest banks could boost their dividends by an average of 13 per cent when regulators allow them to resume payout increases and still have room to buy back almost 2 per cent of their shares.
A Bloomberg dispatch to the Post reports that the banks' payouts have fallen to the low end of the 40 per cent to 50 per cent of profits they typically distribute because the country's bank regulator prohibited dividend increases and share buybacks in March, 2020. The Office of the Superintendent of Financial Institutions is expected to lift those restrictions in the second half, which would result in dividend hikes at most Big Six banks. National Bank of Canada and Bank of Montreal would have the largest dividend hikes if they paid out 45 per cent of earnings, based on consensus earnings estimates for fiscal 2022, which begins Nov. 1.
Only Bank of Nova Scotia would not be projected to have an increase under that model.
It is unlikely Scotiabank would cut its dividend and would instead allow its payout ratio to drift toward the higher end of its targeted range. The bank last declared a dividend increase August, 2019, when it raised it 3.4 per cent.
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