Crypto News

“Silvergate” Bank suspended its dividend payment

Californian bank “Silvergate” (Silvergate) suspended the payment of dividends to its shareholders in order to maintain liquidity on its balance sheet.

According to Valx and quoted by Coin Telegraph, according to the statement of Silvergate Bank on January 27, the payment of dividends to the preferred shares of type A of this company, which has a fixed interest of 5.375%, will be stopped in order to preserve cash.

In its announcement, the company stated that the reason for this was the safe passage of the “crypto winter”. However, he emphasized that the liquidity situation of this bank is still such that it can handle the financial obligations to its customers. Silvergate added:

This decision reflects the company’s focus on maintaining a highly liquid balance sheet with a strong capital position in the current volatile cryptocurrency market.

The company emphasized that the board of directors will re-evaluate the decision as market conditions change.

The announcement came just 11 days after Silvergate reported a $1 billion loss in the fourth quarter of last year. Silvergate considered the reason for its poor performance to be the negative sentiments prevailing in the market, which has led to a low-risk approach of its customers.

In the said report, Alan Lane, the CEO of this bank, had a similar tone to the recent statement and noted that the bank is still optimistic about the field of cryptocurrencies, but needs to change some things to maintain liquidity in the balance sheet.

The news of the suspension of dividend payments on Friday, January 27 caused a negative market reaction and a drop in the price of the premium and ordinary shares of this company. According to data from Yahoo Finance, the price of Silvergate’s preferred stock decreased by 22.71% to $8.85, and the price of its common stock decreased by 3.76% to $13.58.

The situation in the 12-month period is not very promising; Silvergate’s premium and common stock prices have decreased by 60% and 87% respectively during the last year.

The post “Silvergate” Bank suspends its dividend payment appeared first on Wallex Blog. appeared.


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