[뉴스토마토 최홍 기자] Financial authorities advised banks and landlords to set the dividend payout ratio within 20%. This is because, as a result of the stress test, all banks exceeded the minimum capital obligation ratio in all scenarios (long-term recovery, long-term recession), but in the dividend-limiting regulatory ratio, many banks were found to be below the minimum obligation ratio in the long-term recession-type scenario.
The authorities announced on the 27th that they had voted a’recommendation on capital management of banks and bank holdings for countering Corona 19′.
The Financial Supervisory Service conducted a stress test (top-down) using an internationally verified model (STARS). This model has been evaluated by the IMF as’a well-developed model to measure the loss absorption capacity of financial companies’. In particular, the authorities estimated changes in the bank’s capital ratio over the next three years within a scenario jointly prepared by the FSS and the Bank of Korea. Based on the top-down estimation results, the results were confirmed by reflecting the results of the stress test (bottom-up) of individual banks and capital expansion after the base date (end of June of last year).
This stress test was conducted in two scenarios: U-shaped (long-term recovery) and L-shaped (long-term recession). The U-shape is a scenario that recovers in 2022 after expanding negative growth in 2021 due to the global economic slowdown. The L-shape is planning to grow to zero in 2022 after expanding negative growth in 2021.
As a result of the stress test, the capital ratio of all banks exceeded the minimum obligation ratio in all scenarios. According to the banking supervision regulations, the minimum mandatory ratio is 4.5% for common stock, 6% for basic capital, and 8% for total capital. However, in the U-shaped scenario, all banks exceeded the dividend limit regulation ratio, but in the L-shaped scenario where the economic recession persists for a long time, it was found that many banks did not. The dividend-limiting regulatory ratio is 7% for common stock, 8.5% for basic capital, and 10.5% for total capital.
Accordingly, the authorities recommended that domestic bank holding companies and banks pay dividends (including interim dividends and treasury stock purchases) within 20% of their net profits to maintain and improve their ability to absorb losses. On the other hand, in the L-shaped scenario, dividends were made autonomously where the dividend limit exceeded the regulatory ratio.
The application period of this recommendation is until the end of June. After the end of the recommendation, dividends can be voluntarily distributed as long as the capital adequacy is maintained.
Chairman Eun Seong-soo (right) is attending the 28th Emergency Economy Central Countermeasure Headquarters Meeting held at the Seoul Government Complex in Jongno-gu, Seoul on the morning of the 27th and the 1st Innovation Growth Strategy Meeting in 2021. Photo/Newsis
Reporter Choi Hong [email protected]
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