Unaitas Sacco declares dividend of nine percent

Unaitas Chairman Joseph Ngaai (left), CEO Tony Mwangi (centre) and Metropolitan executive director James Murigu during the AGM

NAIROBI, KENYA: Unaitas has posted 65 per cent growth in comprehensive income from Sh244 million in 2016 to Sh403.7 million in the financial year ended December 2017.

The Sacco displayed resilience in the challenging business environment characterised by interest rate cap and extended electioneering period to post 27 per cent growth of after tax profit to Sh338 million. In 2016, after tax profit was Sh268 million.

Its enhanced business strategy and good customer relations supported by entry into new markets helped the Sacco's deposits to grow by 10 per cent signaling increased customer confidence.

Despite total income dropping marginally by 4 per cent due to the impact of rate cap, which reduced average lending rates and the interest rate spread. Unaitas was able to offset the shortfall with innovative cost management strategies, reducing cost by 10 per cent.

At the same time, total assets expanded by 10 per cent in a year to year with a similar growth rate being demonstrated on savings and deposits. Unaitas was in compliance with all regulatory requirements in a year that saw its liquid ratio rise by 100 basis points to 34 percent. The minimum statutory ratio is 15 per cent.

The board of directors has proposed a dividend of 9 percent on investment shares, which is an increase from the 7 per cent that was paid in the previous financial year.

While in 2016 the Sacco distributed Sh192.1 million in dividends, the board is proposes to declare Sh273.9 million on last year's performance. This translates to a dividend rise of 43 per cent.

The Sacco intends to open up new branches in Kisumu and Eldoret next month to solidify the gains that are already being felt with newly opened branches in Embu, Meru and Kisii.

According to Joseph Kabugu, the Chairman of the board of Unaitas the firm also intends carry out a business feasibility study to identify three additional branches in a move that will further advance it brand visibility and national presence.

"The gains we have so far made after agency banking services went live in November 2017 surpassed our targets in terms of the agents onboard, deposit attraction and transactions. We want to ride on this gain and do much better in 2018," he said.