Featured Product

    MAS Issues Guidance on Dividend Distributions by Banks

    July 30, 2020

    MAS published a statement guidance on dividend distribution by banks. MAS called on locally incorporated banks headquartered in Singapore to cap their total dividends per share financial year 2020 at 60% of the dividends per share of the financial year and offer shareholders the option of receiving the dividends to be paid for financial year 2020 in scrip in lieu of cash. MAS also announced that it will continue to provide USD via the MAS USD Facility following the extension of MAS’ USD 60 billion swap arrangement with the US FED through March 31, 2021. The MAS USD Facility will offer up to USD 60 billion of funding to banks, to facilitate USD lending to businesses.

    As part of the guidance on dividend distributions, MAS highlights that 60% cap on the dividend balances of local banks for financial year 2020 is in line with the objective of capital conservation within shareholder interests. While the capital positions of local banks are strong, the dividend restrictions are a preemptive measure to bolster their resilience and capacity to support lending to businesses and individuals through an uncertain period ahead for the economy. Earlier, in April 2020, MAS had encouraged banks in Singapore to ensure that sustained lending took priority over discretionary distributions. Nonetheless, given the substantial uncertainties ahead and that global economies are not yet showing sustained signs of recovery, it would be prudent for local banks to put aside a greater portion of earnings during this period. This will bolster the ability of these banks to continue to support the credit needs of businesses and consumers as well as absorb economic shocks should a more adverse scenario materialize. MAS encourages banks to conserve and carefully manage their capital, by exercising restraint in discretionary expenditure and management compensation. 

     

    Keywords: Asia Pacific, Singapore, Banking, Dividend Distribution, COVID-19, Liquidity Facility, Credit Risk, MAS

    Related Articles
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    News

    EIOPA Report Identifies Key Financial Stability Risks for Insurers

    EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for First Quarter of 2020

    EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Issues Updates on Stress Test Exercise for Banks in EU

    EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.

    July 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Guidance Related to Matching Adjustment under Solvency II

    PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.

    July 30, 2020 WebPage Regulatory News
    News

    APRA Updates Guidance on Capital Management for Banks

    APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.

    July 29, 2020 WebPage Regulatory News
    News

    FSB Report Reviews Macro-Prudential Framework and Tools in Germany

    FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.

    July 29, 2020 WebPage Regulatory News
    News

    EBA Urges Firms to Finalize Preparations for End of Brexit Transition

    EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.

    July 29, 2020 WebPage Regulatory News
    News

    SRB on Operational Continuity in Resolution and FMI Contingency Plans

    SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.

    July 29, 2020 WebPage Regulatory News
    News

    ECB Clarifies Extension and Cessation of Policies Amid COVID Pandemic

    ECB extended its recommendation to banks on dividend distributions and share buy-backs until January 01, 2021.

    July 28, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5604