Dividend payouts rise as economy improves
Securities trader at Nairobi Securities Exchange trading floor at the Exchange Building in Nairobi on August 26, 2020.
What you need to know:
- Nairobi Securities Exchange (NSE) on Friday joined a growing list of firms that paid or declared interim dividends for investors.
- Several lenders have so far already paid or declared interim dividends of about Sh5.7 billion.
The number of corporates dishing out dividends to shareholders for the year ending December has risen, pointing to improved profits and a bright economic outlook.
The Nairobi Securities Exchange (NSE) on Friday joined a growing list of firms that paid or declared interim dividends for investors.
The NSE board announced a surprise special dividend of 50 cents per ordinary share for the year ending December 31.
Several lenders including Standard Chartered Bank Kenya, KCB Group, and Stanbic Holdings have so far already paid or declared interim dividends of about Sh5.7 billion.
KCB declared a surprise interim dividend of Sh1 per share or an aggregate of Sh3.2 billion after its net profit more than doubled in the nine months up to September.
Stanbic Holdings in August declared an interim dividend payout of Sh1.7 per share or a total of Sh672 million.
Largest dividend payer
It was the first bank to reinstate interim dividends after its net profit surged 37 per cent in the half-year ended June to Sh3.5 billion.
StanChart Kenya also made an unexpected interim dividend announcement for the third quarter, proposing a payout of Sh5 per share or a total of Sh1.8 billion after its net income rose 46.6 per cent to Sh6.3 billion supported by lower costs and higher non-interest income.
And Absa signalled it would resume dividend payout at the end of the year due to an improved financial performance.
“Our capital and liquidity levels are solid to navigate the coming quarters and we are seeing opportunities for growth in our balance sheet with recovery in revenue growth and profits expected. We are confident, at this point, to resume payment of dividend at the full year 2021,” the lender said in a statement.
In 2020, Absa withheld dividends after its profit fell due to costs attributable to rising loan defaults coupled with economic uncertainty in the wake of the Covid-19 pandemic.
Equity Group, previously the second largest dividend payer among banks, is also set to resume cash distribution of at least Sh9.4 billion in a move that will lift the payouts.
Kenya has registered economic resurgence, especially in the second half of this year due to the lifting of restrictions earlier imposed to curb the spread of Covid-19. This helped the economy grow 10.1 per cent year-on-year in the second quarter of 2021.
