A Stanbic Bank branch on Kimathi Street, Nairobi. FILE PHOTO | NMG Stanbic Holdings is the first bank to reinstate interim dividends after its net profit surged 37 percent in the half year ended June to Sh3.5 billion.
The company declared a payout of Sh1.7 per share or a total of Sh672 million to be paid on September 27 to shareholders who will be on the register as of September 6.
Stanbic, alongside KCB , Absa Bank Kenya and Standard Chartered Bank Kenya suspended interim dividends in 2020 after years of steady mid-year payouts.
The move was attributed to capital-preservation strategies that took hold in the wake of the economic damage wrought by the Covid-19 pandemic.
Investors will be waiting to see if the other big banks will join Stanbic in resuming dividend payouts, with banks in general posting improved earnings compared to last year as indicated by first quarter results.
Stanbic’s new interim dividend is the highest in three years and comes on the back of the group’s profit rising 37 percent to Sh3.5 billion in the half year to June from Sh2.55 billion a year earlier.
The bank’s net interest income grew by 9.5 percent to Sh6.9 billion on loan book growth and improved margins.
Non-interest income, mainly linked to fees and commissions on loans, increased 10.5 percent to Sh5.48 billion.
“We have realigned our strategy to focus more on our customer needs through our client-centricity value proposition and providing innovative solutions that are empowering and blend in with their lifestyle,” said Charles Mudiwa, CEO at Stanbic.
Slowed lending that followed reduced economic activity after Kenya’s first Covid-19 case in March and costs linked to mounting defaults that followed cut lenders’ profits 29.5 percent last year.
But the easing of restrictions and rollout of Covid-19 vaccines has triggered a gradual recovery in the economy, prompting banks to boost lending amid repayment of defaulted loans.Central Bank of Kenya (CBK) data shows that banks’ pre-tax earnings in the five months to May rose by 42 percent to Sh76.4 billion from Sh53.9 billion posted in a similar period last year.
