Singapore banks' dividend cap to bring short-term pain, but higher payouts in end

Singapore

SHARES of Singapore's local lenders extended their slide on Thursday, after the central bank asked them to cap dividend payouts.

At the closing bell, DBS had dropped S$0.63 or 3.1 per cent to S$19.77; OCBC Bank had tumbled S$0.34 or 3.8 per cent to S$8.56, and UOB fell S$0.63 or 3.2 per cent to S$19.39. They were the most actively traded counters by value on the bourse for the day.

The Monetary Authority of Singapore (MAS) on Wednesday called on Singapore banks to cap their total dividends per share (DPS) for FY20 at 60 per cent of FY19's total DPS, and offer shareholders the option of receiving dividends in scrip in lieu of cash.

This is a pre-emptive measure to ensure the lenders have adequate capital buffers to absorb economic shocks and continue to support recovery in the real economy…

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