Via the excellent Jonathon Mott at UBS:
ADIs expected to “seriously consider” deferring decisions on dividends
Following recent announcements suspending bank dividends by several global regulators, APRA stated that it expects all ADIs (Authorised Deposit Taking Institutions) and insurers to “limit discretionary capital distributions in the months ahead” and instead use these capital buffers to maintain lending capacity to support the economy. Further, APRA stated that “During at least the next couple of months” it expects ADIs “will seriously consider deferring decisions on the appropriate level of dividends until the outlook is clearer”. Where a bank is confident it can pay a dividend following “robust stress testing that has been discussed with APRA, this should nevertheless be at a materially reduced level and offset to the extent possible through the use of Dividend Reinvestment Plans and other capital management initiatives.”
