Citigroup says the move will be viewed negatively by investors as dividend yield is an important factor when considering buying bank stocks. UBS sees the central bank’s move as prudent in the context of the coronavirus pandemic and no threat to the sustainability of payouts.
Shares of the three lenders extended recent losses on Thursday. DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. each dropped more than 3%, while United Overseas Bank Ltd. fell‘Buying Opportunity’“The short term and prudent nature of this measure does not raise any question marks on the long-term sustainability of dividends,” UBS Group analyst Aakash Rawat wrote in a note. “Investors with a slightly longer-term horizon are likely to see this weakness as a buying opportunity.
According to Sanford C. Bernstein, a cap rather than outright postponement suggests MAS is sufficiently comfortable with the banks’ ability to ride through the year. Investors should keep holding the stocks as banks are likely to resume payouts at 2019 levels as soon as they’re able, analysts Kevin Kwek and Pranav Gundlapalle wrote in a note on Wednesday.
The cut in dividends will add to the pain of a sharp sequential narrowing of net interest margins and may prompt banks to front-load provisions, they wrote.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Local banks should cap FY2020 dividends, offer shareholders alternatives to conserve capital: MASSINGAPORE: The Monetary Authority of Singapore (MAS) has advised local banks to cap their dividends for FY2020, calling it a 'pre-emptive' move to ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »
Singapore urges banks to cap dividends in face of economic uncertaintySingapore asked its banks on Wednesday to cap dividend payments this year to conserve capital and increase capacity to lend to businesses and individuals due to the grim economic outlook caused by the COVID-19 pandemic. With the city-state facing its deepest recession ever, the Monetary Authority of
Source: YahooSG - 🏆 3. / 71 Read more »
Singapore bank shares fall after regulator caps dividendsShares in Singapore banks fell in early Thursday trade after the central bank asked local banks to cap dividends this year to conserve capital and increase lending capacity amid an uncertain economic outlook during the COVID-19 pandemic. Shares in DBS Group lost 3.3%, OCBC shed 2.8% and United Overseas
Source: YahooSG - 🏆 3. / 71 Read more »
MAS calls on local banks to cap dividend, offer scrip optionTHE Monetary Authority of Singapore (MAS) on Wednesday called on local banks to cap their total dividends per share (DPS) for FY2020 at 60 per cent of the amount in the previous financial year, in a move to shore up capital amid the uncertain economic climate. Read more at The Business Times.
Source: BusinessTimes - 🏆 15. / 51 Read more »
MAS urges banks to cap dividends in face of economic uncertaintySINGAPORE (Reuters) - The Monetary Authority of Singapore asked its banks on Wednesday to cap dividend payments this year to conserve capital and increase capacity to lend to businesses and individuals due to the grim economic outlook caused by the Covid-19 pandemic.. Read more at straitstimes.com.
Source: The Straits Times - 🏆 8. / 63 Read more »