The financial institutions concerned may be exempted from the restriction only under strict conditions. They have the opportunity to pay dividends if their post-payment Tier 1 capital adequacy ratio decreases only minimally, their capital buffer remains at the expected high level, they do not have an impairment deficit and their business prospects are adequate based on the information submitted to MNB.

Lenders have also been instructed to refrain from repurchasing shares for the purpose of remunerating shareholders and they should consider limiting payments for performance-based remuneration to persons covered by their remuneration policy until the end of the year.

MNB said it made its decisions because the blanket loan repayment moratorium, introduced in the spring of 2020 to ease the economic fallout from the coronavirus crisis, has been extended till the end of September 2021 and there is a possibility that it will be extended further.

Earlier the central bank had told lenders to suspend dividend payments until January 1, 2021, which was then extended to September 30, 2021.