Local bank shares sold off on dividend payout cap

DBS, OCBC and UOB account for nearly 40 per cent of the Straits Times Index, which dropped as much as 2.4 per cent before ending down 1.7 per cent yesterday. ST PHOTO: CHONG JUN LIANG
DBS, OCBC and UOB account for nearly 40 per cent of the Straits Times Index, which dropped as much as 2.4 per cent before ending down 1.7 per cent yesterday. ST PHOTO: CHONG JUN LIANG

Investors shed holdings as MAS acts to 'ensure banks' capital buffers remain ample'

Investors sold off shares of DBS Group Holdings, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB) after Singapore's central bank asked the lenders to cap dividends this year to ensure they can support businesses and individuals in the face of significant uncertainties ahead.

In what analysts called the regulator's first such pre-emptive move spurred by economic uncertainty amid the Covid-19 pandemic, the Monetary Authority of Singapore (MAS) on Wednesday urged banks to cap their total dividends per share this year to 60 per cent of last year's amount. It also said they can offer shareholders the option of receiving the dividends in the form of additional shares instead of cash.

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A version of this article appeared in the print edition of The Straits Times on July 31, 2020, with the headline 'Local bank shares sold off on dividend payout cap'. Print Edition | Subscribe