Thai central bank lifts banks’ dividend payout limit as economy recovers

BANGKOK: Thailand’s central bank on Thursday (Jun 30) removed a limit on banks’ dividend payouts and required them to pay a regular fee rate to the Financial Institutions Development Fund (FIDF) from next year, officials said.

With a clearer economic trend and strong banks, there is less need for broad-based support measures that can be gradually normalised, the central bank said.

Previously, banks’ dividend payout rate was limited to no more than 50 per cent of annual profit, but a stress test showed they could now cope with risks, the central bank said.

The central bank’s FIDF provides financial assistance to troubled institutions.

From 2023, banks will have to pay an annual regular fee rate of 0.46 per cent of their deposits to the FIDF after a reduced 0.23 per cent rate ends this year, the Bank of Thailand (BOT) said.

Over the past two years, various fiscal and financial support measures had been introduced, with the benchmark kept at a record low of 0.5 per cent to support the economy, senior director Sakkapop Panyanukul told a news conference.

“We’ve used quite a lot of policy space, so the need to build it up will become more necessary in the future,” he said.

Recently, the BOT also signalled an interest rate hike.

Senior director Suwannee Jatsadasak said the BOT would continue to help with debt restructuring and a surge in bad debt was not expected.