Higher dividends from DBS, OCBC and UOB.

I was already invested in DBS and OCBC before the last bear market triggered by the COVID-19 pandemic and fully expected them to be important income generators in my portfolio.

Although the local banks are well capitalized and have the ability to maintain their dividends, the Monetary Authority of Singapore (MAS) told them to cap dividends last year at 60% of what they were before.

See:

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As the dust started to settle in the last bear market, I added UOB to my investment portfolio, gradually increasing my investments in all three banks.

The buying went on for a few months, started in April and went on till October last year.

I was prepared for a year or two of lower dividends from the local banks and, in fact, in my last two passive income updates, I said that my larger investments in the local banks should deliver decent dividends this year but nothing spectacular.

I had very modest expectations.




Well, good news as this is going to change in the future because the MAS has lifted dividend restrictions.

This will have a big impact on my passive income going forward as going back to 100% of what they paid out in the past means a 66% increase in dividends from the local banks.

Since I increased my exposure to the local banks rather substantially in 2020, there should be an even bigger jump in their contribution to my passive income compared to 2019.

Things are looking up.




Hopefully, this is also a sign that the worst is behind us and that the broader economy will do better in the future.


“While some uncertainties remain, Singapore’s economy is expected to continue on its recovery path, given strengthening global demand and progress in our vaccination program…” – MAS

Congratulations to fellow shareholders and good luck to all of us.




“Moody’s had changed its outlook on the Singapore banking system from negative to stable in March, in recognition of the improving economy, potential for bank earnings to grow and broadly stable asset quality.”




Added on 7 August 2021:
[embedded content] “…higher payouts of about 15 cents per share on average.”

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