Bank of Thailand Removes Banks’ Dividend Payout Cap; Boost Sentiment in Banking Stocks

A cap on dividend payouts by banks was lifted by the Bank of Thailand on Thursday, and from early 2023, banks will be required to pay a regular fee rate to the Financial Institutions Development Fund (FIDF), officials said.

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

The dividend payout rate of banks was previously capped at no more than 50 percent of yearly profit, but a stress test revealed they could now withstand risks.

In addition, from 2023, banks will be required to pay an annual regular fee rate of 0.46 percent of their deposits to the Financial Institutions Development Fund (FIDF), which provides financial assistance to troubled financial institutions, after a reduced 0.23 percent rate ends this year.


Trinity Securities stated that it expects a rally in banking stocks today, as they stand to benefit the most from the recent move by the Thai central bank. During the third quarter, Trinity advised investors to accumulate safe-haven stocks that can endure an economic slowdown and interest rate hike, such as healthcare, consumer staples, power, and telecommunications. 

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