A recent announcement by Bendigo and Adelaide Bank Ltd. to defer its full-year dividend payment led to a significant decline in Australian shares. However, the decision has been made to put an end to the financial sector’s payout worries.

As a result of shedding of 1.63 percent by the financials, the S&P/ASX 200 index closed at 6,076.4, their lowest since August 10, 2020.

Owing to deferring of dividends due to the economic uncertainty caused by the COVID-19 pandemic, the mid-sized bank fell 6.6%, while its full-year profit remained almost half compared to last year.

CommSec market analyst James Tao believes that this economic uncertainty has put banks in dilemma of paying their dividends. As the financial regulator has deferred dividends, the payout is expected to be less than half of their profit in 2020.

The Australian shares that suffered the most with this announcement include financial stocks, technology stocks and energy stocks.

Financial stocks of AMP Ltd. and the Big Four banks namely Westpac Banking Corp., Commonwealth Bank of Australia, National Australia Bank, and Australia and New Zealand Banking Group saw negative growth.

Technology stocks on the other hand witnessed a decline of 1.2 percent, with shares of Computershare Ltd. dropping 2.4 percent and Afterpay Ltd. falling 2.7 percent.

While Energy stocks fell 0.8 percent, with Ampol Ltd.’s shares dropping 3.6 percent and Cooper Energy Ltd.’s shares losing 1.3 percent.

Interestingly, the performance of the benchmark S&P/NZX 50 index in its neighboring country New Zealand was much improved with an increase of 1.93 percent to 11,672.95.

This increase was driven by a spike of 5.43 percent in Summerset Group Holdings Ltd.’s shares and 5.33 in Ryman Healthcare Ltd.’ shares.

Dividend payouts are very popular in Australia as evident with the fact that 8 percent of the Australian population manages retirement income on their own.