The distribution of dividends of multinational banks operating in Latin America

This chapter analyses the dividend distribution of multinational banks that operate in six selected Latin America countries, namely Argentina, Brazil, Chile, Colombia, Mexico and Peru. Bank level data containing various activities of foreign subsidiaries that operate in the six countries for the period 2013-19, is used for this intent. The findings suggest that Mexico and Peru have the highest foreign bank participation. However, foreign banks in Brazil, Chile and Mexico have made higher dividend payments to the shareholders of their parent banks. This also holds when looking at dividend payments in relation to their earnings. This suggests that a large share of earnings leave the countries in which they operate in the form of dividend payments rather than being reinvested. Furthermore, this chapter argues that macroeconomic conditions in host countries could help explain the dividend repartition of foreign banks.