a. Bad debts – shall include any debt on which interest is past due for a period of six (6) months, unless it is well secured and in process of collection.
b. Well secured – A debt shall be considered well secured (or fully secured), if it is covered by collateral in the form of a duly constituted mortgage, pledge, or lien on real or personal properties, including securities, having a loan value sufficient to discharge the debt in full, including accrued interest and other pertinent fees and expenses.
c. In process of collection – A debt due to a bank shall be considered in process of collection when it is the subject of continuing extrajudicial or judicial proceedings aimed towards its full settlement or liquidation or otherwise to place it in current status.
a. Clearing account with the Bangko Sentral is not overdrawn;
b. Liquidity floor requirement for government funds;
c. Minimum capitalization requirement and risk-based capital ratios as provided under applicable and existing capital adequacy framework;
d. The combined requirement for Capital conservation buffer and the countercyclical capital buffer as as defined in Appendix 59, for universal and commercial banks (UBs/KBs) and their subsidiary banks and quasi-banks QBs;
e. Higher loss absorbency requirement, phased-in starting 1 January 2017 with full implementation by 1 January 2019, in accordance with Domestic Systemically Important Banks (DSIBs) Framework as provided under Sec. 128, for UB/KBs and their subsidiary banks and QBs that are identified as DSIBs; and
f. Has not committed any unsafe or unsound banking as defined under existing regulations and/or major acts or omissions1 as may be determined by the Bangko Sentral to be ground for suspension of dividend distribution, unless this has been addressed by the bank as confirmed by the Monetary Board or the Deputy Governor of the appropriate sector, as may be applicable, upon recommendation of the appropriate supervising department of the Bangko Sentral.
a. Submission of a duly notarized certification (Appendix 120) signed by the President, or an officer of equivalent rank, and the Chief Compliance Officer stating that the bank has complied with the requirements on the declaration of dividends provided under this Section on Requirements on the declaration of dividends, and, in the case of rural banks and cooperative banks, Sec. 124-C (Limitations/amount available for dividends declared by rural banks and cooperative banks), as well as other existing applicable laws; and
b. Submission of the Report on Dividends Declared listed under Appendix 7, which shall be considered a Category A-1 report.
a. The amount corresponding to the fraction should be given in the form of cash dividend; and
b. The certificate of stock issued should be in whole numbers, and the fractional shares shall be issued in the form of scrip certificates. In no case shall the certificate of stock be issued including such fractional share. The scrip certificate is temporary in nature and should be redeemed in cash when the bank is in a position to do so, or stockholders holding such scrip certificates may negotiate with other stockholders for the purchase or sale of such shares to convert them into full shares, subject to the limitations on stockholdings as provided by law.
- Major acts or omissions is defined as bank individual failure to comply with the requirements of banking laws, rules and regulations as well as Monetary Board directives having material impact on bank capital, solvency, liquidity or profitability, and/or those violations classified as major offenses under the Report of Examination, except those classified under unsafe or unsound banking.
- Unearned profits or income refers to unrealized items which are considered not available for dividend declaration such as accumulated share/equity in net income of its subsidiaries, associates or joint venture accounted for under the equity method, recognized deferred tax asset, foreign exchange profit arising from revaluation of foreign exchange denominated accounts and others.
- Subject banks whose shares are listed with any domestic stock exchange may declare dividends and give immediate notice of such declaration to the SEC and the stock exchanges, in compliance with pertinent rules of the SEC: Provided, That no record date is fixed for such dividend pending verification of the report on such declaration by the appropriate supervising department of the Bangko Sentral.