KUALA LUMPUR: Malaysian banking sector's aggregate dividends are likely to increase by 26 per cent in financial year 2021 (FY202) year-on-year (yoy) to US$3.43 billion, after a 27.8 per cent plunge in FY2020 due to Covid-19, said IHS Markit.
The FY2021 year-end dividends are due to be announced by this month.
IHS Markit expects the dividend payouts to grow 4.6 per cent in FY2022, supported by strong liquidity and capital buffers.
"However, there is a mixed picture for dividends in FY2021," IHS Markit said in a report today.
AMMB Holdings Bhd decided to hold dividend payouts until the end of the year owing to cautious capital management, while CIMB Group Holdings Bhd is expected to boost its year-end dividend more than threefold compared to last year.
Malayan Banking Bhd (Maybank) and Public Bank Bhd would continue to be the top dividend contributors, the firm said.
IHS Markit saud the Malaysian banking sector outlook for 2022 was stable as economic activity was expected to return to pre-pandemic levels.
This leads to more jobs and higher wages, as well as a gradual increase in interest rates that will help banks improve net interest margins and profitability.
However, there are still uncertainties around the Covid-19 pandemic and prolonged supply chain disruptions, as well as natural disaster risks, such as flood.
"The upbeat trend is aligned with the regional sentiment across Southeast Asia. Banks from Thailand, Singapore and Indonesia are poised for steady growth for the new year.
"Banking dividends for all four markets are expected to rise by 9.25 per cent on average in FY2022," it added.