On 29 July 2020, the Monetary Authority of Singapore (MAS) released a statement recommending that Singapore banks (i.e. DBS, OCBC, and UOB) cap their FY2020 dividend per share at 60% of their FY2019 amount. In addition, it also recommended that the banks offer shareholders the option to receive their dividend in the form of shares instead of cash (a scrip dividend). The reason for this move is to ensure that Singapore banks conserve enough cash and retain ample liquidity as we navigate the economic uncertainties ahead due to COVID-19. Now, if you are concerned about the financial strength of Singapore banks due to this statement, let me assure you that they remain among the most well-capitalised banks in the world. A common ratio to measure a bank’s financial strength is the Common Equity Tier 1 (CET1) ratio which measures a bank’s CET1 capital against its total risk weighted assets. The higher the ratio, the stronger a bank’s financial position....