APRA has updated its capital management guidance for banks and insurers, saying Australia’s financial system is well positioned to withstand a severe downturn and easing restrictions around paying dividends.

The guidance replaces its recommendation in April this year that banks and insurers “seriously consider deferring decisions on the appropriate level of dividends until the outlook is clearer”.

“It must be remembered that a 50 per cent payout ratio is substantially lower than the normal bank payout ratio, and with bank profits likely to fall due to bad debt provisions, investors will probably still need to look outside the banks for income,” said Dr Don Hamson, managing director of Plato Investment Management.

“I now encourage the banks to listen to the regulator’s latest guidance and resume paying out a level of dividends that won’t leave investors in the lurch.”

Click here to read the full article in Investor Daily.

SUBSCRIBE TO OUR NEWSLETTER

Subscribe to keep up to date with the latest fund
information and insights.

“A good decision is based on knowledge and not on numbers.”

Plato (427-347 BC)

Disclaimer

Plato Investment Management Limited AFSL 504616 ABN 77 120 730 136 (‘Plato’).

Whilst Plato believes the information contained in this communication is based on reliable information, no warranty is given as to its accuracy and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Plato disclaim all liability to any person relying on the information contained on this website in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information.

Pinnacle Fund Services Limited ABN 29 082 494 362 AFSL 238371 is the product issuer of funds managed by Plato. Any potential investor should consider the relevant Product Disclosure Statement available at https://plato.com.au/retail-funds/ in deciding whether to acquire, or continue to hold units in a fund. The issuer is not licensed to provide financial product advice. Please consult your financial adviser before making a decision. Past performance is not a reliable indicator of future performance.

Disclosure contained on this website is for general information only. Any opinions or forecasts reflect the judgment and assumptions of Plato on the basis of information at the date of publication and may later change without notice. Any projections are estimates only and may not be realised in the future. Information on this website is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained on the website is prohibited without obtaining prior written permission from Plato. Past performance is not a reliable indicator of future performance.

Leave a Reply