Credit Agricole SA (ACA.FR) said Wednesday that it will submit a proposal to its shareholders in regard to withdrawing its loyalty dividend scheme after the European Central Bank ordered it to remove its loyalty dividend bonus clause by Sept. 2018.
The withdrawal comes after the European Banking Authority ruled that payment of a loyalty dividend by Credit Agricole constituted a "preferential distribution" in breach of the capital-requirements regulation.
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Credit Agricole said that the European Central Bank agreed with the ruling and ordered it to remove the clause. The French bank will submit a proposal on the removal of the clause to a general meeting of shareholders to be held on May 16, 2018.
Only 6% of ordinary shares are currently eligible for the loyalty dividend, representing an additional payout of EUR10 million in 2016, the bank said. A special meeting for shareholders entitled to the dividend will take place on April 4, 2018, it said.
Credit Agricole added that it was considering compensating the beneficiaries.
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(END) Dow Jones Newswires
December 20, 2017 02:07 ET (07:07 GMT)