Kenyattas, Equity CEO, Ndegwas get Sh1.6bn dividend

The families of Jomo Kenyatta, former Central Bank of Kenya Governor Philip Ndegwa and Equity Group chief executive James Mwangi will pocket Sh1.62 billion in the wake of record banking profits that have delivered outsize shareholder payouts.

The Kenyattas lead the pack with a payout of Sh652.5 million from their 13.2 percent stake in NCBA Group #ticker:NCBA , which on Wednesday doubled its dividend per share to Sh3 for the year to December 2021.

The Ndegwa family, which owns 11.7 percent stake in the bank, will earn Sh580.8 million in dividends for the period.

NCBA, which emerged from the merger between the listed NIC Bank and the private CBA Group in 2019, on Wednesday said its profits for the year to December more than doubled to Sh10.22 billion from Sh4.57 billion in 2020, helped by higher income and a fall in loan loss provisioning.

This performance is replicated across the industry, with most banks that have reported the full-year results indicating triple-digit profit growth besides having built surplus capital as costs for loan defaults fall and lenders resume lending.

The seven of nine tier-one banks that have already reported their financial results for 2021 have nearly doubled their net earnings, raking in Sh128.1 billion compared to Sh69.9 billion in 2020.

Equity Bank #ticker:EQTY on Tuesday announced its first dividend in three years – Sh3 per share – after doubling net profit to Sh40 billion.

Mr Mwangi, who owns a 3.4 percent direct stake in Equity, will as a result cement his position as the biggest individual dividend earner with a payout of Sh383.4 million.

This amount is higher than the annual net earnings of more than a third of NSE-listed firms, underlining the impact of Equity’s profitability and the size of Mr Mwangi’s stake in the bank.

His 188.6 million shares in Equity currently have a market value of about Sh6.52 billion, marking one of the single-largest investments in a publicly-traded firm by an individual.

Kenyattas’ stake in NCBA stood at Sh5.46 billion while Ndegwas’ ownership is worth Sh4.89 billion.Equity did not pay dividends for 2019 and 2020, citing the need to build a capital buffer after the pandemic hit the banking sector and the economy at large hard.The company also walked away from a proposed share swap deal to acquire from four regional banks Atlas Mara that would have also required additional capital injection.The payouts, therefore, represent a turnaround for the top bank owners, who had to endure […]

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