DIVIDENDS SEEN RISING TO US$3.43B
IHS Markit says outlook is stable this year as economic activity rebounds
THE banking sector’s aggregate financial year 2021 dividends are likely to increase 26 per cent year-on-year to US$3.43 billion after a 27.8 per cent plunge in the previous financial year due to the Covid-19 pandemic, said IHS Markit in a report yesterday.
It also expects the dividend payouts to grow 4.6 per cent in the financial year 2022, supported by strong liquidity and capital buffers.
“However, there is a mixed picture for dividends in financial year 2021.”
It said AMMB Holdings Bhd had decided to hold dividend payouts until the end of the year owing to cautious capital management while CIMB Group Holdings Bhd was expected to boost its year-end dividend more than threefold compared to last year.
Malayan Banking Bhd (Maybank) and Public Bank Bhd would continue to be the top dividend contributors, it added.
IHS Markit said the banking sector outlook was stable this year as economic activity was expected to return to pre-pandemic levels, leading to more jobs and higher wages, as well as a gradual increase in interest rates that would help banks improve net interest margins and profitability.
However, there are still uncertainties around the pandemic and prolonged supply chain disruptions, as well as natural disaster risks such as flood.
“The upbeat trend is aligned with the regional sentiment across Southeast Asia. Banks from Thailand, Singapore and Indonesia are poised for steady growth for the new year.
“Banking dividends for all four markets are expected to rise by 9.25 per cent on average in the financial year 2022,” it added.