There is no prospect of a sharp rise in dividend payments Shareholders in UK companies saw their dividend payments cut by £10bn last year, according to a report.UK companies paid out £56.9bn to investors in 2009, 15% less than in 2008, said Capita Registrars. Investors in the banking sector were among the worst hit, said the report, after the industry cut payouts by £6bn from 2008 levels. It predicted dividends were unlikely to grow strongly in 2010 because of a sluggish economic recovery. The report said banks which are partly state owned paid nothing to shareholders in 2009, HSBC made small reductions and Standard Chartered paid more cash to shareholders in dividends than it had in 2008. WHAT IS A DIVIDEND? A dividend is a cash payment from a firm's earnings that is distributed to shareholders - essentially an investor's share of a company's profits which they receive as a part-owner of the company. Companies can choose to retain profits to reinvest in the company with the hope of creating more profits and therefore increasing the share price.[Read more...]