MAS urges finance firms to ease dividends after pressing on banks

They are also suggested to offer shareholders the option of receiving FY2020 dividends in scrip.

The Monetary Authority of Singapore (MAS) has also urged local finance companies to cap their total dividends per share (DPS) for FY2020 at 60% of FY2019’s level, according to a statement.

This follows after MAS requested the same for banks a week earlier as a measure to withstand the ongoing impact of the pandemic. 

Also read: Singapore banks' shares dive after MAS calls for dividend cap

Financial firms are also encouraged to offer shareholders the option of receiving the dividends to be paid for FY2020 in scrip in lieu of cash.

“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 said.

It also adds that 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.