BOT Sets Out Dividend Payment Policy for Banks
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
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Jing Zhang
Quantitative researcher; credit risk modeling and analysis expert; in-demand industry speaker; published author and CCAR authority
Previous Article
APRA Consults on Revisions to Remuneration StandardRelated Articles
BIS Examines Use of Big Data and Machine Learning at Central Banks
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA Finalizes Reporting Standard for Operational Risk Requirements
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB Publishes Guide for Determining Penalties for Regulatory Breaches
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS Sets Out Good Practices to Manage Operational Risks Amid COVID
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR Announces New Data Collection Application for Banks and Insurers
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB Publishes Overview of Resolution Tools Available in Banking Union
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting