MFSA issues Circular to Credit Institutions on Dividend Distributions or Share Buybacks

On 2 April, the Malta Financial Services Authority (the “MFSA”) issued a circular to credit institutions on dividend distributions or share buybacks. In the Circular the MFSA announces that it shall be adopting the Recommendation of the ECB of 27 March 2020 on dividend distributions during the COVID-19 pandemic (ECB/2020/19) in its entirety to all credit institutions licensed in terms of the Banking Act (Chapter 371 of the Laws of Malta) from today and at least until 1 October 2020.

The MFSA clarifies that, amongst others, significant credit institutions should refrain from making dividend distributions and performing share buybacks aimed at remunerating shareholders and that less significant institutions should also refrain from making discretionary dividend distributions.