The financials paying dividends for 1H21
Following the lifting of the dividend restrictions by the Australian Prudential Regulation Authority (APRA), financials are taking the opportunity to return to strong dividends but it may take two years for them to reach pre-COVID levels.
As at 18 February, more than 10 financial firms had reported their first-half 2021 results to the Australian Securities Exchange (ASX).
Last year, APRA implemented rules which saw banks and other financials unable to pay a dividend of more than 50% of earnings in order to ensure firms retained a sufficient level of capital in the pandemic. However, these restrictions were lifted in December 2020.
This led to bank dividends being cut by an average of 60% in 2020, a blow for retirees who relied on bank shares for income.
Particular focus was given to Commonwealth Bank which paid a dividend of $1.50 per share, a 53% increase on the same period a year ago.
Peter Gardner, portfolio manager at Plato Investment Management, said: “There would have been quite a few retirees and other investors sweating on CBA’s dividend announcement and what we have seen is a strong indicator that recovery in the sector is well underway.
“The dividend is in line with our expectations that bank dividend will move toward more normal payout ratios of 70%-80%, however, pre-COVID dividends may still be another 24 months away.”
The firms which had reported their first-half results were:
|
Firm |
Dividend (fully franked) |
|
Commonwealth Bank |
$1.50 per share |
|
Magellan Financial Group |
97 cents per share |
|
Suncorp |
26 cents per share |
|
Fiducian |
12.3 cents per share |
|
Pinnacle |
11.7 cents per share |
|
Bell Financial Group |
10.5 cents per share |
|
Challenger |
9.5 cents per share |
|
Netwealth |
9.06 cents per share |
|
Centrepoint Alliance |
4.0 cents per share |
|
Perpetual |
0.84 cents per share |
|
AMP |
No dividend |
AUTHOR
Laura Dew
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