BOT published a circular on the dividend payment policy for 2020, based on financial institutions’ capital plans and stress test results for 2020-2022. The circular applies to commercial banks registered in Thailand, commercial banks registered in foreign countries, credit foncier companies, and finance companies. BOT assessment showed that financial institutions have adequate levels of capital and loan-loss provisions to withstand the impact of COVID-19 pandemic. However, due to high uncertainty in the near future, BOT supports the preventive measures by allowing financial institutions to pay dividends for 2020 not exceeding last year payout ratio and 50% of this year’s net profit.
This dividend payment policy of BOT is in line with the guidelines of many overseas regulators and will benefit financial institutions’ shareholders, depositors, and debtors in the long run. The circular highlights that financial institutions have enhanced their awareness and readiness to deal with the uncertainty by continuously increasing their loan-loss provisions. The non-performing loan coverage ratio and the capital adequacy ratio of the Thai banking system in the third quarter of 2020 were 150% and 19.8%, respectively. The dividend payment policy would help ensure resilience of the Thai financial system, continuously maintain high level of capital, and would serve as an important mechanism to support economic recovery.
Related Links (in English and Thai)
Keywords: Asia Pacific, Thailand, Banking, COVID-19, Dividend Distribution, Stress Testing, Regulatory Capital, BOT
Previous ArticleAPRA Consults on Revisions to Remuneration Standard
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.