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The dividend policy of state-owned banks during an economic crisis

Author

Listed:
  • Isakov, Dusan

    (University of Fribourg, Switzerland)

  • Keane, Allister
  • Schatt, Alain

Abstract

This study examines the dividend policy of Swiss state-owned banks during the recent economic crisis caused by the COVID-19 pandemic. Our empirical analysis shows that these banks had higher pre-crisis dividend payouts than other Swiss banks. While other banks reduced dividend payouts during the crisis, state-owned banks maintained higher dividend levels and consistent payout ratios throughout the economic downturn. Thus, the gap between state-owned banks and other banks increased from 18% before the crisis to 24% during the crisis. Moreover, we document that these higher payouts are not due to higher profitability of state-owned banks. Finally, we find no significant differences in dividend yields except when comparing public and private state-owned banks. Overall, this study provides evidence of the significant influence of dominant state shareholders on banks› financial policies in times of economic crisis.

Suggested Citation

  • Isakov, Dusan & Keane, Allister & Schatt, Alain, 2025. "The dividend policy of state-owned banks during an economic crisis," FSES Working Papers 541, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    • Handle: RePEc:fri:fribow:fribow00541
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    More about this item

    Keywords

    State-owned banks; economic crisis; payout ratio; dividend yield; Switzerland;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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