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New York Community Bancorp Inc. Message Board

  • munchyman1 munchyman1 Nov 21, 2013 2:51 PM Flag

    Dividend will only be cut if NYCB scores a big takeover target...

    Most dividend cuts are because the bank cant financially continue to pay them. If NYCB has to cut dividend, it will be because they found a great takeover target, grow into larger bank, and are forced, by government regulation on larger banks, to hold on to more of their profits.

    Big takeover = big win for the bank.
    No takeover = big dividends keep coming to shareholder.

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    • From what I understand, the only restriction on a healthy bank is that their payout rate can't exceed net revenue unless they get FDIC permission, which is usually granted on a limited basis if the bank is adequately capitalized. NYCB's payout rate is high, but doesn't exceed net revenue. I don't see them making an acquisition that would significantly reduce revenue or have a major impact on capitalization. But since short interest is up, we can expect to see more rumors about a pending dividend cut.

 
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