Singapore banks' dividends to make strong comeback in FY 2021

Key implications

• The banking trio of DBS, UOB, and OCBC in Singapore are expected to increase dividends by an average rate of 40% on a dividends-per-share (DPS) basis in fiscal year (FY) 2021 in the base case scenario, with estimated total dividend payouts expected in the amount of US$5.1 billion, versus US$3.6 billion in 2020.
• Our bull case scenario forecasts DBS, UOB, and OCBC will pay DPS of S$1.17, S$1.18, and S$0.52, respectively, for FY 2021.
• The recovery of dividends is attributable to the projected removal of dividend restrictions by the Monetary Authority of Singapore (MAS) and broad-based economic recovery on the back of the effective execution of Singapore's vaccination program.
• Singaporean banks lead among Southeast Asian markets in terms of aggregate dividend payouts recovery in 2021, with around 42% growth in comparison with Malaysia and Indonesia, which are expected to report largely flat aggregate dividends.

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Posted 26 July 2021 by Ralph Chen, Research Analyst II, Dividend Forecasting for Australia and Singapore Market

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