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The Financial Express

Banks can give a maximum of 30pc dividend for 2020

| Updated: February 11, 2021 09:07:14


Banks can give a maximum of 30pc dividend for 2020

The banking companies would be able to declare maximum 30 per cent dividend, including 15 per cent cash, for the year ended on December 31, 2020.

The Bangladesh Bank (BB) has set the limit for the banks which have at least 15 per cent or more reserve capital, including 2.5 per cent capital conservation buffer against the risk-weighted assets.

The banks will also have to maintain necessary provisioning and have the ability to meet other expenses, according to a circular issued on Sunday.

Against the backdrop of the adverse impact of Covid pandemic, it said, the financial health of the banks as well as return on investment for the shareholders were considered while preparing the policy.

The banks having a reserve capital from at least 13.5 per cent to 15 per cent would be able to declare maximum 25 per cent dividend, including 12.5 per cent cash, subject to meeting other requirements including provisioning against risk-weighted assets.

With having a reserve capital of at least 11.875 per cent, the banks would be able to declare maximum 15 per cent dividend, including 7.5 per cent cash, subject to approval of the central bank.

The banks having 12.5 per cent capital will be allowed to declare 12 per cent dividend, including 6.0 per cent cash.

The banks with a reserve capital from 11.875 per cent to 12.5 per cent would be able to declare 10 per cent dividend, including 5.0 per cent cash.

The banks having reserve capital from 10.625 per cent to 11.875 per cent will be able to declare at best 5.0 per cent stock dividend subject to approval by the central bank.

Earlier in May 2020, Bangladesh Bank had announced a dividend policy for the banks for 2019.

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