KCB Group shareholders will get their dividends for last year at a time when some banks are cutting back on the payments due to economic uncertainties from the COVID-19 pandemic
Three top-tier banks have recalled their dividend to shareholders as the Covid-19 pandemic continues to roil the financial markets.
Standard Chartered Bank is the third lender to withdraw dividend payment after Equity Bank and NCBA. Prompted during the last post monetary policy press briefing, the Central Bank of Kenya said it has not developed a policy on dividend payments and to pay or not to pay rests with individual institutions based on assessment.
The International Monetary Fund (IMF) has however backed the halting of dividend payments and share buy backs by banks in response to the Covid-19 pandemic.
- 1 AGM reports paint a different picture of CEOs salaries
- 2 Kabras Sugar and KCB to renew rivalry in Kenya Cup curtain-raiser
- 3 Covid-19 accelerates growth in e-commerce
- 4 Firms get two-thirds of Naivasha port space
IMF argues that the suspension of dividend payments by banks this year will help preserve much needed funding to ride the prevailing storm.
On Thursday, KCB announced a Sh11.1 billion total dividend payout to shareholders for the 2019 financial year, signifying a sustained return to shareholders amid a tough operating environment.
Shareholders have approved a final Sh2.50 dividend per ordinary share as recommended by the Board at this year’s Annual General Meeting.
The bank hosted an electronic AGM where shareholders were able to register, access information pertaining to the 2019 Integrated Report and Audited Consolidated Financial Statements, vote, ask questions and seek clarifications.
The payout brings to Sh3.50 the total dividend for the year, taking into account an interim dividend of Sh1.00 per share paid out last November.
KCB Group Chairman Andrew Wambari Kairu told shareholders that in spite of the tough business environment last year, the business continued to generate returns for its shareholders.
Looking ahead, he said KCB is focused on continually supporting its stakeholders through the ongoing global COVID-19 pandemic.
“The crisis has seen the world confront its biggest health crisis this century. Our thoughts remain with the individuals and communities affected by the pandemic. We recognize that our actions during this pandemic are essential in keeping our economies across the region going. We have incorporated guidelines provided by the Government and adopted a raft of measures to cushion our staff, customers and stakeholders from the effects of the disease” he said.
In 2019, KCB Group posted a 5 per cent jump in profit after tax to Sh25.2 billion. Last month, KCB reported Sh6.3 billion in profit after tax in the first quarter of 2020 ending March. This was an 8 per cent jump from the Sh5.8 billion posted a similar period last year, driven by stronger non-funded income lines and interest income boost due to loan book growth.
The Group CEO and MD Joshua Oigara said under the current tough macro-economic environment, business performance is likely to be subdued in the second half of the year.
“With the likely continuation of the crisis into the currently unforeseeable future, we anticipate and expect that the ability of some customers to service their loans will be impacted, there will be reduced demand for credit and this may impact our business performance for the remainder of the year,” he said.
“The organization has prepared itself to operate under these adverse circumstances to the benefit of our customers and shareholders. We have therefore taken measures to conserve our capital, manage costs and keep a keen eye on the banks liquidity.” added Mr Oigara.