MAS Calls on Finance Companies to Moderate FY2020 Dividends

The Monetary Authority of Singapore (MAS) has urged finance companies incorporated in Singapore to cap their total dividends per share (DPS) for FY2020 at 60% of FY2019’s level.

The finance companies are also encouraged to offer shareholders the option of receiving the dividends to be paid for FY2020 in scrip in lieu of cash, MAS said in a press release.

Capital positions of the finance companies remain strong and the dividend restriction is a pre-emptive measure to bolster the finance companies’ ability to continue to support the credit needs of businesses and consumers in the current business environment. MAS had similarly called on locally incorporated banks headquartered in Singapore to moderate their dividends last week.

The dividend restriction for finance companies balances the objective of capital conservation to sustain lending with the interests of shareholders who may rely on this income.