Singapore’s Banks Get to Keep Their Cash—No More Dividend Caps
When Covid hit, the Monetary Authority of Singapore (MAS) slapped a 60 % cap on the dividends banks and finance firms could pay. The rule was meant to keep firms from over‑puffing their stakes when the world was teetering on the edge.
Now, as the global economy is looking a bit better, the MAS has lifted that restriction—so banks can now freely decide how much to give back to shareholders.
Why the Change?
- Last Year’s Cap: 60 % of the previous year’s dividend rolled back on the 2020 fiscal year.
- Current Rationale: The world’s outlook is improving, so banks are no longer in a “tighter” environment.
- MAS’s View: “Local banks and finance companies have weathered the pandemic well and are in a strong position to support the economic recovery,” says Ho Hern Shin, deputy managing director.
Other Measures Still in Play
- Dividend “Scrip” Option: Companies can still offer shareholders a choice to receive dividends in paper form instead of cash.
- Capital Ratios: Banks have maintained solid capital buffers—even with higher pandemic provisioning.
- Stress Testing: Even in a slow‑down scenario, CAP ratios remain resilient.
What It Means for You
While the caps are gone, the MAS cautions the banks to be “prudently discretionary” with their payouts, keeping focus on customer support over fancy stock‑splits.
Govt forecasts a 4 %‑6 % GDP growth this year, though it might push higher. The drumbeat: “Help customers, stay realistic.”
