FBD shareholders may not receive the €35m windfall they had been expecting next month.
The payment by FBD of final dividends for 2019 may now be in doubt after the European Insurance and Occupational Pensions Authority (EIOPA) urged insurers to temporarily suspend dividends and share buybacks.
EIOPA is an advisory body operating at EU level. It provides guidelines for insurance companies but does not have regulatory power.
EIOPA’s comments were made as the global economy continues to reel from the impact of the coronavirus.
FBD today said it was postponing its AGM, due to be held next month, where shareholders were to vote on the group’s dividends.
It said the decision to do so “has been taken in light of the current and developing situation surrounding the impact of Covid-19, recommendations from regulatory authorities, public authorities, and consideration of the health and safety of shareholders, attendees and staff.”
In a note earlier today, analysts at Davy Stockbrokers said while EIOPA was not calling for an outright suspension of dividends, “it would indicate that dividend pay-outs by FBD and all European insurers are now in serious doubt”.
The statement from EIOPA comes a week after the European Central Bank asked banks not to pay dividends to shareholders or buy back their own shares until at least October, including in respect of last year’s profits.
This has seen both Bank of Ireland and AIB shelve plans to pay a final dividend in respect of 2019.
FBD more than doubled its profits to €112m last year, a rise of 124pc. It benefited from the release of €40m in prior year reserves. In addition, it recorded investment return of €28m, a figure likely to reduce this year given the current market turmoil.
Earlier this week, Paul D’Alton was appointed interim CEO and a director of both the group and of FBD Insurance.
He takes over from Fiona Muldoon who announced last October she planned to step down as CEO, saying at the time she would leave her position in October 2020.