Europe's bumper Q2 puts global dividend payouts on track for record year
The figures by fund manager Janus Henderson estimated that 88% of companies globally had either increased their dividends or held them steady in Q2, resulting in $568.1 billion worth of worldwide payouts since the start of the year.
The fastest growth came in Europe, where a number of countries such Italy and Spain have introduced or are looking at windfall taxes on bumper profits made by banks and energy firms on the back of rising interest rates and energy prices.
Dividends were up nearly 10% to $184.5 billion. That did not including Britain, where the quarterly total dropped to $30.7 billion from last year's $34.9 billion, when oil and gas firms saw a leap in payments after Russia's invasion of Ukraine sent commodity prices surging.
This time around, the surge in global interest rates meant banks contributed half the world's dividend growth and drove a quarter of Europe's increase.
At the same time, U.S. dividend growth slowed for the sixth consecutive quarter.
«We do expect dividend growth to continue,» Ben Lofthouse, Head of Global Equity income at Janus Henderson said, adding that the banking sector was expected to continue to fuel it for the rest of the year despite waning economic momentum.
«A weaker economic environment is typically negative for banks,» Lofthouse said.
«But the positive effect on bank margins from the end of years of ultra-low interest rates is very powerful and is driving dividend payouts».
The slowdown in U.S. dividend growth left the region's total at $148 billion, up 4.6% year-on-year on an underlying basis once lower one-off special dividends were taken into account.
That was «still a creditable increase» the report said adding that 98% of the U.S.
