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Last year, the central bank had urged them to cap their total
dividends per share for the fiscal year 2020 at 60% of the
previous year's level.
The central bank cited the improving global economic outlook for
not extending the restrictions.
"Local banks and finance companies have weathered the pandemic
well and are in a strong position to support the economic
recovery," Ho Hern Shin, deputy managing director at the MAS,
said.
Banks and finance companies had also been encouraged to offer
shareholders the option of receiving the dividends to be paid
for 2020 in scrip in lieu of cash.
On Wednesday, the MAS said banks and finance companies had
maintained strong capital adequacy ratios and continued to meet
the credit needs of individuals and businesses, despite higher
levels of provisioning made during the pandemic.
Under the latest stress tests, these ratios are projected to
remain resilient even under an adverse macroeconomic scenario
caused by a stalled global recovery, leading to the Singapore
economy slipping into another recession in 2021, the MAS said.
"As downside risks remain, local banks and finance companies
should exercise continued prudence in their discretionary
distributions, whilst prioritising support to customers," Ho
said.
The government expects gross domestic product to expand 4% to 6%
this year, although growth could exceed the upper end of that
forecast. The bellwether economy had posted its worst recession
last year.
(Reporting by Aradhana Aravindan in Singapore; Editing by Ed
Davies)
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