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Jakarta Post

SOEs promise higher dividends to help economy

  • Riska Rahman, Norman Harsono and Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Fri, March 13 2020   /  12:40 am

State-owned companies have come to the rescue against the backdrop of a crashing domestic stock market and cash-strapped state budget by promising share buybacks and disburse higher dividends earlier to cushion the economic impacts of COVID-19.All four state-owned banks have allocated larger dividends earlier than last year as the government struggles with low tax collection and the need to disburse more money to stimulate a cooling economy.The country’s largest bank by assets, publicly listed Bank Rakyat Indonesia (BRI), announced in February its plan to distribute Rp 20.6 trillion (US$1.5 billion) in dividends to its shareholders this year. The dividends are equal to 60 percent of the bank’s profits in 2019, higher than its previous payout ratio of 50 percent. Bank Mandiri also decided to give out bigger dividends this year, with plans to distribute Rp 16.49 trillion to shareholder...