General Announcement::MAS CALLS ON LOCAL BANKS TO MODERATE FY2020 DIVIDENDS
Issuer & Securities
DBS GROUP HOLDINGS LTD
DBS GROUP HOLDINGS LTD - SG1L01001701 - D05
Date &Time of Broadcast
Announcement Sub Title
MAS CALLS ON LOCAL BANKS TO MODERATE FY2020 DIVIDENDS
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We refer to the media release by the Monetary Authority of Singapore ("MAS") today calling on local banks to moderate their FY2020 dividend payouts (https://www.mas.gov.sg/news/media-releases/2020/mas-calls-on-local-banks-to-moderate-fy2020-dividends).
The MAS' announcement is similar to dividend restrictions that other regulators have placed on the banks they supervise. The MAS recognises that Singapore banks' capital positions are strong, with stress tests showing that they will remain resilient under adverse conditions from a serious and prolonged public health crisis. We view its restriction capping local banks' 2020 dividends at 60% of 2019 levels as a pre-emptive measure that is consistent with its well-known customary prudence. At the same time, the 60% cap recognises the interests of shareholders as it is not as severe as the restrictions in some other jurisdictions, which include an outright halt to distributions.
The cap restricts our cumulative dividends to 72 cents per share for the next four quarters starting from second-quarter 2020, or 18 cents per quarter. As is the normal practice, all dividends are subject to Board approval.
DBS' capital and liquidity are well above regulatory requirements, and its balance sheet has also been fortified by high levels of allowance reserves. It is in a strong position to support business and individual customers during a prolonged period of uncertainty.