On the dividend front, all of the Big 6 Canadian banks announced they will maintain their dividend payment level (quarter over quarter) with their next payments.
The banks saw some nice stock price gains as well, into Thursday, August 27. As an example, Royal bank was up over 4% from Monday to Thursday.
What we will be watching are the non-performing loans. Only Scotiabank set aside more monies for the potential of loan losses in this quarter compared to the last quarter in May of 2020. If you read a quarterly report you’ll see them listed as PCL—provisions for credit losses.
For the record, I hold the Big 3 of Royal Bank, TD and Scotiabank.
Perhaps we’ll get a replay of the financial crisis of 2007 to 2009. In that recession, the big Canadian banks did not cut dividends. They all held, and then got back on the dividend growth train within a year or two.
Global dividends crushed
Continuing on the dividend watch, it was the worst quarterly fall for Global dividends since 2009. Total shareholder payouts fell by $108 billion to $382 billion, the lowest second-quarter total since 2012, according to Janus Henderson’s index of global payouts, published on Monday, August 24. The 22% decline was the worst since the asset manager launched the index in 2009, and the UK and Europe were the most affected. Almost half of the dividend cuts in Europe are courtesy of the banking sector.
Dividends fell in every region of the world except for North America.
And the best performing market according to Janus Henderson? Those true north dividends held up strong. The Canadian market has increased its dividends over 4%, year-over-year.
