SINGAPORE, July 29 (Reuters) - Singapore asked its banks on Wednesday to cap dividend payments this year to conserve capital and increase capacity to lend to businesses and individuals due to the grim economic outlook caused by the COVID-19 pandemic.
With the city-state facing its deepest recession ever, the Monetary Authority of Singapore called on banks to cap total dividends per share for FY2020 at 60% of what they paid out in 2019.
MAS also asked locally-incorporated banks headquartered in the city-state to offer shareholders dividends in 2020 in the form of shares instead of cash.
"MAS wants to ensure the banks' capital buffers remain ample in the face of significant uncertainties ahead, so that they can sustain lending to the economy," said MAS chief Ravi Menon.
"We have carefully calibrated the restriction on dividends, taking into account the needs of investors who may rely on this income."
(Reporting by John Geddie Editing by Gareth Jones)