12.5.3.6 Dividend ban

Interestingly, there are cases in which there is no mention of nationalisation, write-down, dilution, participation in a capital raise or remaining at the bank in liquidation. This was the case in FIB, CIF, KBC, FIH and Liberbank. It would, however, be wrong to assume that this would mean that there is no burden- sharing in these cases: these cases were characterised by a dividend ban. This behavioural restriction entails that the bank will not pay any dividends (during the restructuring period). Although a dividend ban constitutes burden-sharing by shareholders, it is far more limited than the other forms of burden-sharing, such as nationalisation or dilution. Indeed, not receiving any dividends during a couple of years is far less burdensome than being required to transfer one’s share to the State in the context of a nationalisation. In this sense, a dividend ban is not equivalent to the other forms of burden-sharing.

NB: This burden-sharing measure will be discussed in detail in section 12.8.