Singapore, 7 Aug 2020… 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.
2 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.
3 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.