Big Aussie banks to limit dividends to investors

Should maintain adequate capital buffers.

The Australian Prudential Regulation Authority has told Australia's “domestically systemically important banks” or DSIBs to limit dividend payouts to investors to meet new rules requiring banks to hold billions of dollars more capital than expected. APRA regulates deposit taking institutions.

APRA sent a letter to banks last week telling them to maintain adequate capital buffers. The request dashes hopes for special or extra dividends in the current bank reporting season.

Analysts said high dividend yields and expectations of bonus capital returns have been a key reason in the stellar run in bank shares.