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PCFT to maintain dividend despite mounting pressure on financials

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PCFT to maintain dividend despite mounting pressure on financials
Mike Sheen, 04 May 2020, Investment Week

Uses £9m reserves

The board of the Polar Capital Global Financials trust (PCFT) has opted to maintain dividends due to its shareholders this August and in February 2021 despite widespread dividend cuts across its investable universe.

In a statement this morning, the board confirmed that despite “exceptional market conditions arising from the Covid-19 pandemic”, which has forced severe dividend cuts across financial services firms, PCFT has built up sufficient distributable reserves to maintain its next scheduled pay outs.

The £155m trust has 1.7 years of dividend cover with reserves of around £9m according to AIC data. It has posted five year dividend growth of 7.3% per annum for a dividend yield of 4.5%

PCFT’s board said: “The company has an income and growth mandate and the board is aware of the importance of income to shareholders, especially at a time when many listed companies, including some in the financials sector, are cutting or suspending their dividends…

Head of investment company research at QuotedData James Carthew explained that PCFT’s managers, Nick Brind and John Yakas (pictured), are confident that the banking sector “is much better placed to rise out of this crisis than it was in 2008”.

He added: “Balance sheets have been rebuilt and banks have, in general, left the loan market to fund the world’s growing debt mountain.

“Not every bank will emerge unscathed, but it is the job of the people behind an actively managed fund to identify the winners.”

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