Three-in-five Australian publicly listed companies have either cut or withheld their dividends during 2020 as a result of COVID-19, a global dividend index shows.
Between April and December 2020, Aussie firms either cut or cancelled dividend payments nearly 40%, according to Janus Henderson Investors.
In the Asia Pacific, payouts fell 11.9%, which is roughly in line with the global average, and the lowest since mid-2016.
Australia was restricted in its dividend payouts by APRA as a result of the pandemic, capping dividends at 50% of profits. From 1 January 2021, APRA lifted the restrictions.
"While APRA will no longer hold banks to a minimum level of earnings retention, the onus will be on boards to carefully consider the sustainable rate for dividends, taking into account the outlook for profitability, capital and the economic environment," the regulator said.
Dividend cuts were most severe in Australia, the UK and Europe, Janus Henderson found, which all together accounted for over half the total reduction in payouts globally, owing to the forced curtailment on banking dividends by regulators.
Banks accounted for one third of global dividend reductions by value, more than three times as much as oil producers, the second worst-hit sector.
Globally, dividend cuts and cancellations reached US$220 billion ($285bn). Conversely, shareholders were rewarded US$965 billion ($1.25tn) in dividends for the period.
Janus Henderson head of Australia Matt Gaden said while the disruption in some countries and sectors has been extreme, a global approach to income investing meant the benefits of diversification have helped mitigate some of these effects.
"Crucially, the world's banks (which usually pay the largest share of the world's dividends) mostly entered the crisis with healthy balance sheets. Bank dividends may have been restricted by regulators in some parts of the world, but the banking system has continued to function, underpinned by robust capital levels, which is vital for the smooth operation of economies," he said.