The prudential regulator has been riding banks and insurers hard over the past month and it left lenders very little wriggle room when it came to dividend policy.
Big four bank shares have historically been prized for their fat dividends,but the payouts are now under severe pressure.
Industry consensus is that a 30 per cent cut in dividends paid by the big-four banks is possible but don’t forget the dividend yield on their shares is about 10 per cent per annum,fully franked.
Plato Investments managing director Don Hamson has warned that older investors will be"hung out to dry"if the big four banks pull the plug on dividends.
A leading investment house has warned a third of Australian companies could cut dividends this year,with an extended shutdown likely to see that number rise.
Even if the financial regulator hadn't advised banks to cut or defer their payouts to shareholders,they would have done so anyway.
Investors have been warned that three of the nation's biggest banks could suspend their dividend payments for the first half,after regulatory pressure.
The powerful banking regulator has urged banks and insurance companies to"seriously consider"suspending their decisions on dividend payments.
The toll road giant has withdrawn its guidance for its shareholder payout for the June half after the coronavirus outbreak caused traffic on its highways to plummet in recent weeks.
A recession could quite easily cause the share of bank loans that become bad or doubtful to double,triggering a 20 per cent fall in profits and dividends.
As interest rates continue to fall the price of Australian stocks keeps rising,even though companies'earnings growth is slowing.