MAS removes caps on dividend payments by local banks

Wednesday 28 July 2021 15:10 CET | News

The Monetary Authority of Singapore (MAS) has decided to remove caps on dividends paid by locally incorporated banks and finance companies, according to Reuters.

The caps were introduced amid an uncertain economic outlook earlier in the COVID-19 pandemic. In 2020, the central bank had urged local banks to cap their total dividends per share for the fiscal year 2020 at 60% of the previous year's level. The central bank cited the improving global economic outlook for not extending the restrictions.

Banks and finance companies had also been encouraged to offer shareholders the option of receiving the dividends to be paid for 2020 in scrip in lieu of cash. MAS said banks and finance companies had maintained strong capital adequacy ratios and continued to meet the credit needs of individuals and businesses, despite higher levels of provisioning made during the pandemic.

Under the latest stress tests, these ratios are projected to remain resilient even under an adverse macroeconomic scenario caused by a stalled global recovery, leading to the Singapore economy slipping into another recession in 2021, the MAS said.

The government expects gross domestic product to expand 4% to 6% in 2021, although growth could exceed the upper end of that forecast. 

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Keywords: central bank, Monetary Authority of Singapore (MAS), regulation
Categories: Banking & Fintech | Payments General
Countries: Singapore
This article is part of category

Banking & Fintech