Analysts expect dividends of banking stocks to rebound this year when the Monetary Authority of Singapore (MAS) permits. In 1QFY2021 ended March, DBS Group Holdings, which pays out quarterly dividends, announced a total payout of $460 million in dividends, representing a payout ratio of around 22%. In FY2019, DBS had raised its quarterly dividend from 30 cents per quarter to 33 cents per quarter.

However, in FY2020, the MAS directed banks to moderate dividends and preserve capital for supporting the economy during Covid-19. DBS’s dividends per quarter from 2QFY2020 onwards was 18 cents, which it maintained for 1QFY2021.

“CET1 (common equity tier 1) was 14.3% at the end of the first quarter and since then, Shenzhen Rural Commercial Bank has had less than a 0.2 percentage points impact. So capital is more than sufficient even if we were to bid for part of Citibank’s portfolio. Our high capital levels also mean that we have the capacity to return to our pre-Covid dividend,” says Piyush Gupta during a 1QFY2021 results briefing at the end of April.

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