SINGAPORE (Mar 5): It’s always nice to receive a hefty dividend paid into your bank account. And that is what shareholders of DBS Group Holdings will experience in May. DBS will be paying a core dividend of 60 cents a share and a special dividend of 50 cents a share, taking the total payout for FY2017 to $1.43 a share, or $3,567 million, which works out to be a payout ratio of 83%, or more than twice the amount the bank paid out for FY2016.

Return on equity, growth outlook and capital are all related. The way the banks disburse dividends to shareholders says much about their outlook, the way they manage their capital, their risk-weighted assets and capital ­adequacy ratios (CARs) and, of course, their ROEs.  

Shareholders look for a combination of growth, income and total shareholder return. Year to date, DBS’s share price has gained 17.5% versus Oversea-Chinese Banking Corp’s 8% and United Overseas Bank’s 6.9%. It is difficult to say how much DBS’s share price will adjust, once the stock goes ex-dividend on May 3.

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