Veröffentlicht von • Silvergate Bank, a state-chartered bank listed on the NYSE, has announced that it will suspend dividend payout on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A.
• The bank’s primary focus is to maintain a highly liquid balance sheet with a strong capital position in order to navigate the high volatility in crypto.
• The board of directors will re-evaluate quarterly dividend payments depending on market conditions.
Silvergate Bank, a state-chartered bank based in California and listed on the New York Stock Exchange, recently announced that it will suspend dividend payout on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. This move is being taken in order to preserve capital and maintain a highly liquid balance sheet with a strong capital position, as the digital currency market attempts to recover from the liquidity crisis of 2022.
The crypto market has been highly volatile, with prices peaking at around $70,000 in November 2021 before plummeting to $15,300 in November 2022. This change in the market was caused by several macroeconomic factors, such as a shift in monetary policy that saw central banks hike interest rates to tame runaway inflation and a decrease in capital flow.
In response to this, the board of directors at Silvergate Bank has opted to suspend dividend payout in order to remain highly liquid and be able to better navigate the volatile market. The bank stated that the primary focus is to maintain a strong capital position, and the board of directors will re-evaluate the payments of quarterly dividends depending on how market conditions evolve.
The move was met with some criticism, as many investors had expected to receive dividend payments from the bank. However, many investors also understand the importance of maintaining a strong capital position in a volatile market.
Overall, Silvergate Bank’s decision to suspend dividend payout is a strategic move that will allow the bank to remain liquid and have a strong capital position as the digital currency market attempts to recover. The board of directors will re-evaluate the payments of quarterly dividends depending on how market conditions evolve.