Shares in Britain's biggest banks fell heavily on Wednesday morning after they became the latest to scrap billions of pounds in dividends, as businesses scramble to save money by stopping payments to shareholders amid the coronavirus outbreak.

Shares in HSBC fell 7.4%, Barclays lost 4.6%, Standard Chartered was down 6.2%, while Lloyds lost 4.3% of its value and the Royal Bank of Scotland was down 4%.

The banks - also including Nationwide, Santander and NatWest - said on Tuesday that they would not be returning money to shareholders via dividends, or buying back their own shares, until the end of the year.

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It comes after a request from the Bank of England's Prudential Regulation Authority (PRA) that they suspend all plans to return money to shareholders.

The banks will also cancel all outstanding dividends from last year.

The PRA said it "welcomes" the decisions of all the UK's biggest banks to suspend dividends and share buybacks until the end of 2020, and cancel any outstanding payments.

Britain's banks have enough capital to weather severe recessions in both the UK and globally, as markets brace for a potentially huge downturn, the PRA said.

"Although the decisions taken today will result in shareholders not receiving dividends, they are a sensible precautionary step given the unique role that banks need to play in supporting the wider economy through a period of economic disruption, alongside the extraordinary measures being taken by the authorities," it added.

Banks are not likely to need the extra money they save from scrapping dividends, the PRA said, but the extra headroom will allow them to support the economy this year.

The PRA also said it expects banks not to pay any cash bonuses to their top members of staff.

Standard Chartered, NatWest, Santander, the Royal Bank of Scotland, Nationwide, Lloyds, HSBC and Barclays have all agreed to cancel dividends, the PRA said.

Barclays shareholders were expected to be paid £1.03 billion on Friday, Lloyds shareholders would have pocketed £1.58 billion, while RBS had expected to pay its shareholders a total of £968 million. Standard Chartered was due to pay its shareholders $638 million (£517 million).

Taylor Wimpey has scrapped annual bonuses and decided that its board will take a 30% pay cut after the builder temporarily closed all of its show homes, sales centres and construction sites due to the coronavirus outbreak.

The company also said that a 2% annual salary increase for executive directors will be cancelled.

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"The objective of these changes is to conserve cash, with a particular focus on protecting the long-term financial security of the business as a whole, for the benefit of all of the company's stakeholders," Taylor Wimpey said in a statement to shareholders on Wednesday morning.

Taylor Wimpey's 2% pay rise was set to come into force from April 1.

Meanwhile, estate agent Savills has announced that it will withdraw its previously proposed dividend of 27.05p per share, and delayed its annual shareholder meeting.

It said: "In response to the Government's public health instructions and stay at home measures in respect of the evolving situation regarding the Covid-19 pandemic, the board has taken a decision to defer the holding of the company's 2020 Annual General Meeting (AGM) from 6 May 2020 to 25 June 2020."

Nearly a fifth of small firms will run out of cash within the next four weeks, research has suggested as pressure mounts on the Chancellor to overhaul his emergency coronavirus loans scheme for hard-hit businesses.

A report by the Corporate Finance Network of accountants working with nearly 13,000 businesses predicts that 18% of all struggling small companies will not be able to survive the next month due to the UK lockdown.

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This could see nearly four million staff lose their jobs in May, it warned, adding that as many as 42% of small firms could go bust if the lockdown lasts for four months or more.

This is despite Chancellor Rishi Sunak's attempts to shore up the small business sector with a Government-backed emergency loan scheme, which has been widely criticised for failing to offer the support needed.

Banks have come under heavy fire amid claims of unfair lending tactics under the scheme, with some demanding personal guarantees from business owners and others seeking to apply high interest rates once the interest rate-free initial period ends.

The Business, Energy and Industrial Strategy Committee cautioned on Tuesday that problems with the scheme were putting off many firms from accessing the cash.

Rachel Reeves, chairwoman of the cross-party committee of MPs, has written to Mr Sunak outlining concerns over the way lenders are "interpreting" the emergency loan scheme and calling for him to clarify the terms and conditions.

Swathes of small firms have been complaining the scheme is hard to access and that it is not a level playing field, with banks being given too much leeway.