According to research, the coronavirus pandemic led to a sharp decline in global dividends last year, with the amount of investor payouts declining by 12.6% to $1.26 trillion.

As the public health crisis impacted every corner of the globe, prompting lockdowns and inhibiting economic activity, dividend cuts amounted to $220 billion, according to the Global Dividend Index.

According to asset manager Janus Henderson, the total amount of dividends paid out between April and December 2020 was $965.2 billion, with the most severe cuts being in the United Kingdom and Europe.

Both the United Kingdom and Europe together accounted for more than half the total reduction in payouts globally, “mainly owing to the forced curtailment on banking dividends by regulators,” Janus Henderson found.

On a sectoral basis, banks accounted for one-third of global dividend reductions by value, with almost $54 million dividends cut and $34 million canceled within the industry, more than three times as much as oil producers — the next most severely affected sector — which saw just over $24 million payouts cancelled.

Looking ahead to 2021 and as coronavirus vaccines are rolled out, increasing expectations that economies could largely reopen by summer, Janus Henderson predicted that payouts would continue to fall in the first quarter of 2021, although the decline is likely to be smaller than between the second and fourth quarters of 2020.

“The outlook for the full year remains extremely uncertain,” it noted. “The pandemic has intensified in many parts of the world, even as vaccine rollouts provide hope. Importantly, banking dividends will resume in countries where they were curtailed, but they will not come close to 2019 levels in Europe and the UK, and this will limit the potential for growth.”

Janus Henderson’s best-case scenario sees 2021 dividends up 5% on a headline basis to a total of $1.32 trillion.