The Globe and Mail reports in its Friday edition that concern is mounting about the sustainability of banks' dividends after British and European lenders suspended payouts amid the health crisis. The Globe's James Bradshaw and Mark Rendell write that banks everywhere are bracing for a major shock as measures to curb the spread of the COVID-19 virus shut down large parts of the global economy, putting millions out of work and making a painful recession a virtual certainty.
Canadian banks made it through the last financial crisis with dividends intact, and they have built generous capital reserves since then. On Wednesday, the United Kingdom's largest banks bowed to pressure from Britain's financial regulator and suspended dividend payments. Several large European Banks have done the same. So far, bank executives are telling investors not to worry.
"At this time, I don't see a change in TD's dividend policy," chief executive officer Bharat Masrani told reporters after the bank's annual meeting on Thursday.
Toronto-Dominion Bank has "more than adequate capital" to confront the crisis, Mr. Masrani said. He suggested Canadian banks' conservative appetites for risk give them an extra margin of safety.
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