Global dividend payouts forecast to revive in 2021

    Canary Wharf stands in London. (Reuters Photo)

    LONDON – Global dividend payments could rebound by as much as 5 percent this year, a new report estimated on Monday, after the coronavirus caused the biggest slump in payouts since the financial crisis more than a decade ago.

    Companies’ payouts to shareholders plunged more than 10 percent on an underlying basis in 2020 as one in five cut their dividends and one in eight cancelled them altogether.

    A total of $220 billion worth of cuts were made between April and December, based on investment manager Janus Henderson’s Global Dividend Index. But there are signs companies are beginning to reinstate at least some of them.

    Janus Henderson’s report warned that dividends could still fall 2 percent this year, in a worstcase scenario. But its best-case scenario sees 2021 dividends up 5 percent on a headline basis.

    “It is quite likely we will see companies pay special dividends in 2021, utilising strong cash positions to make up some of the decline in distributions in 2020”.

    Banking dividends will be likely to drive the rebound in payouts in 2021, the report said, after the European Central Bank and Bank of England eased blanket bans for lenders on dividends and buybacks.

    These were imposed during the first wave of the crisis to prepare for a potential increase in bad loans.