(Sisa Today, Sisa ON, Sisa On = Reporter Park Jin-young)
The Financial Services Commission recommended that domestic financial holdings and banks pay dividends within 20% of net profit temporarily in order to maintain sufficient loss absorption capacity amid the prolonged COVID-19 situation.
The Financial Services Commission announced on the 27th that it had deliberated and decided on the’Recommendation for Capital Management of Banks and Banking Holdings for Response to Corona 19′ based on the results of the Financial Supervisory Service’s stress test.
The Financial Services Commission said, “Currently, the financial soundness of domestic banks is at a good level despite Corona 19, and last year’s business performance is expected to be similar to that of previous years.” However, responding to economic uncertainty in a situation where Corona 19 is not completely ended. In order to do so, it is a situation that requires preemptive efforts to expand capital.
The dividend limit recommendation is applied until the end of June this year. In addition, dividends for holding companies of banks belonging to domestic bank holding companies are excluded, and policy financial institutions (acid silver, gi-silver, and mercury) whose government compensates for losses are excluded from the recommendations.
In addition, after the end of the recommendation, it is possible to pay dividends autonomously as before, within the scope of maintaining capital adequacy.
Meanwhile, the Financial Supervisory Service estimated the change in the bank’s capital ratio over the next three years based on a scenario jointly prepared with the Bank of Korea, and based on the top-down estimation results, the results of the stress test (bottom-up) of individual banks and capital increase after the base date (end of 20.6) The results were confirmed by reflecting and adjusting the details of capital expansion.
As a result of the stress test, it was found that in all scenarios (U-shaped, L-shaped), the capital ratio of all banks exceeded the minimum obligation ratio. However, in the case of the dividend-limiting regulatory ratio, it was found that all banks outperformed in the U-shaped scenario, but in the L-shaped scenario where the economic recession persisted for a long time, it was found that many banks did not.
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