The Bank of Thailand (BoT) on Thursday relaxed a dividend payment policy for banks, saying they remained strong with adequate loan loss provisions and capital to withstand a high level of uncertainty ahead.
The central bank removed the dividend payout ratio limit, not exceeding the past payout rate, it said.
However, financial institutions still needed to strengthen their capital levels to support the continuation of credit expansion during the beginning of economic recovery.
Therefore, financial institutions are still allowed to pay 2021 dividends not exceeding 50% of 2021 net profits and should maintain a cautious approach in accordance with their performance and risks that may arise, the BoT said in a statement https://www.bot.or.th/English/PressandSpeeches/Press/2021/Pages/n8264.aspx.
The central bank expects to remove all dividend payment restrictions when banks are able to continuously support economic recovery and when economic activity gradually returns to normal, it said.
The results of a stress test for 2021-2023 showed banks remained resilient to withstand such a situation and had enhanced their readiness to deal with uncertainty by increasing their loan loss provisions, the BoT added.