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State pockets Sh22b from Safaricom, KCB dividends

By Dominic Omondi | June 18th 2020

National Treasury Principal Secretary Dr. Julius Muia, National Treasury Cabinet Secretary Ukur Yatani, KCB Group Chairman Andrew Wambari Kairu, and KCB Group CEO and Managing Director Joshua Oigara during the dividend cheque handover to the National Treasury. [Photo: Standard]

Safaricom and KCB Group have boosted the National Treasury’s coffers with a total dividend payout of Sh21.7 billion.

The money is enough to fund the Kazi Kwa Vijana programme and cash transfers to the elderly.   

KCB Group yesterday disbursed Sh2.12 billion in dividend earnings to the government for the year ending December 2019, breaking ranks with some lenders such as Equity Bank and NCBA, which recalled their dividend payouts.

KCB’s return—made up of Sh1 interim dividend and Sh2.50 final dividend—is the highest amount the lender has ever paid to its shareholders and takes its cumulative tally paid to the government to Sh12.98 billion. In 2018, KCB’s dividend payout to Treasury was Sh1.88 billion.

KCB shareholders during the lender’s Annual General Meeting on June 4 approved a Sh11.1 billion total dividend payout.

Good returns

The dividend is to be paid on or before July 3 to shareholders on the register as of the close of business on April 27, 2020.

Speaking in Nairobi when handing over the cheque to Treasury Cabinet Secretary Ukur Yatani, KCB Group Chairman Andrew Kairu noted that the bank has overtime provided a good return on investment to its shareholders, one of which is the government.  

Yatani said the payout, comes at a period when tax collections have been subdued against rising expenditure demands due to the adverse effects of the Covid-19 pandemic, is timely.

“We need to channel resources directly to MSMES (micro, small and medium enterprises) to get them going through the crisis,” said the CS.

Out of a dividend payout of Sh56 billion that Safaricom paid for the financial year ending December last year, the government will receive around Sh24 billion.

In the current financial year ending this month, National Treasury expects to receive Sh29 billion in dividends from its investments. The government also expects to receive dividends of Sh1.5 billion from the Central Bank of Kenya in the current Financial Year.

Already, Treasury has collected investment worth Sh96 billion in the current financial year, much of it from surplus income from State corporations’ earnings from government securities.

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