Weak Pound Could Push UK-Listed Firms' Dividend Payout To $115B This Year

Firms listed in the United Kingdom are likely to make dividend payments to the tune of $115 billion this year as sterling’s weakness is expected to push up the translated value of dollar-declared payouts, according to Reuters, which cited a report by analytics company Link Group.

The group anticipates a headline dividend growth of 2.4% year-on-year to £96.3 billion ($115.90 billion), which is the highest since 2019.

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Sterling Weakness: The pound has lost nearly 11% against the dollar since the beginning of the year, which boosted corporate pay-outs in the quarter. "Exchange rates... will add significant impetus in the second half if sterling is unable to recover its poise," the report said.

About 40% of the total dividends paid in the second quarter were dollar-denominated, and this generated an exchange rate boost of £1.4 billion to their sterling value, Link Group said. This was double the level expected by the group in April based on the exchange rates at the time.

Second Quarter Dividends: Dividends paid-out by London-listed companies jumped almost 40% to £37 billion pounds, just falling short of the all-time record high of £38.5 billion pounds in the second quarter of 2019. Aviva Plc AVVIY, Rio Tinto Limited RIO and Anglo American Plc NGLOY were some of the biggest dividend payers this year.