The pandemic has resulted in the majority of the companies in the world to report less revenue and earnings. Banks’ earnings are under pressure this year especially from the fact that The Federal Reserve made the bold move of slashing interest rates to combat the impact of the pandemic to the economy. This resulted in banks’ Net Interest Margin to decline sharply and ultimately affected banks’ Net Interest Income. Furthermore, in the recent quarters, banks have been setting aside more allowances or provisions in anticipation of increasing non performing loans.

Many banks around the world had decided to scrap or reduce dividends for the year or so and it is a matter of time for the banks in Singapore to do the same. In an interview with CNBC, DBS CEO mentioned that the bank is confident that if the potential costs are around $3 – $5 billion, DBS does not need to cut dividends