Australian banking watchdog seeks to update dividend hold policy

It said that the local economy is now less uncertain than in April.

Australia’s banking regulator wants to update a capital return policy that has stopped dividend payments from banks due to the pandemic, flagging leeway in operations that zoom in on long-term viability of the sector, reports Reuters.

Australian Prudential Regulator Authority (APRA) chairman Wayne Byres said the degree of uncertainty about the local economy was now lower than when it asked banks to consider halting dividend payouts in April.

He said capital markets were functioning in an orderly manner and stress-tests indicated the banks were “well-placed” to withstand any major headwinds ahead.

APRA’s stress-tests assumed a slow recovery in gross domestic product growth over the three-year horizon, unemployment of about 10% in mid-2021 up from 7.4% in June, and a 30% fall in property prices.

Here's more from Reuters.

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