(Bloomberg) — Equity Group Holdings Plc, Kenya’s biggest bank by market value, failed to declare an interim dividend despite almost doubling net income for the first half of the year.
The board of the bank with operations in six African nations is still committed to returning 30% to 50% of income in dividends this year, Chief Executive Officer James Mwangi said in an investor briefing Tuesday morning. Smaller rival Stanbic Holdings Plc has proposed a 1.70 shillings per share payout for the six months through June, while competitors such as KCB Group Ltd., NCBA Group Plc and Co-operative Bank of Kenya Ltd. are yet to publish their financial statements.
“It’s no longer speculative. We’ve gone back to dividend payout starting this year,” Mwangi said. The bank withheld dividends in the past two years, which enabled it to build a “requisite buffer,” he said.
Equity’s cash and cash equivalents soared 154% to 219.5 billion shillings ($2 billion) in the six months, while investments in government securities grew 46% to 315.5 billion shillings. This will enable it to quickly deploy loans to places such as the Democratic Republic of Congo, which is rapidly reforming its economy, and in Uganda, the East African nation on the cusp of oil production, Mwangi said.
In the DRC, where Equity has just concluded an acquisition and formed the nation’s second-biggest bank, deposits almost quadrupled in the year, while loans jumped 160%, Mwangi said.
“DRC seems to be surprising us every day,” he said. The change in the nation’s leadership and rising global commodity prices are favoring that market, he said.
Overall, Equity Holdings net income almost doubled to 17.9 billion shillings, after it slashed loan loss provisions by 64% and grew lending income by 27%. Its share price jumped 3.9% to a six-month high by 11 a.m., in Nairobi.
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