Bank dividends catapult global Q2 payments to record highs By Reuters

Banks continued to propel global dividends to record levels in the second quarter of 2024 as higher interest rates boosted profits, allowing them to pay out higher dividends to shareholders compared to the previous year.

Payouts rose to a record $606.1 billion in the second quarter from $568.1 billion a year earlier, Janus Henderson’s Global Dividend Index report showed on Monday.

WHY IT’S IMPORTANT

Banks have been the largest contributors to global dividends in at least four of the past six quarters. Financial companies contributed to at least 25% of global payments made in the past three years.

Most banks in major economies such as the US and the euro zone beat estimates on second-quarter earnings as higher lending costs fueled profits and investment banking activity picked up.

BY NUMBERS

On an underlying basis, 92% of companies globally raised or held their dividends flat. However, the momentum was tempered by a weaker yen that affected exchange rates.

European payments rose 7.7% from a year earlier to $204.6 billion, with France, Switzerland and Spain posting record dividends and banks accounting for more than half of them.

U.S. payouts also rose 8.6% to $161.5 billion, driven by new dividend payers such as Google (NASDAQ: ) owner Alphabet. The boost from newcomers is expected to keep U.S. payroll growth ahead of the global average in 2024.

HSBC has made its biggest single payment of $4 billion, following the sale of its Canadian unit. Axa and BNP Paribas (OTC: ) were the biggest contributors to European growth, following strong profit performances.

WHAT’S NEXT

The asset manager is upgrading its dividend forecast in 2024, now expecting companies to distribute $1.74 trillion, up 6.4% from the base year, compared with 5% previously.