Standard Chartered Bank branch on Kenyatta Avenue, Nairobi. StanChart has halved dividend to Sh7.50. PHOTO | SALATON NJAU | NATION MEDIA GROUP Standard Chartered Bank (StanChart) Kenya has joined the list of firms cutting their dividend payout after it reduced its previous offer by 50 per cent, citing the need to maintain a strong capital ratio amid the uncertainty of the Covid-19 crisis.
In a notice published on Friday, the lender proposed to cut its final dividend of Sh15 for every ordinary share to Sh7.50. It had previously announced the higher dividend for the year to December 31, 2019 after it reported a net profit of Sh8.2 billion.
“The board, after careful consideration of the events that have taken place since the said financial results were published, particularly the rapidly unfolding economic crisis that has come out of the Covid-19 pandemic, has decided to vary its recommendation and instead recommend to the shareholders the payment of a final dividend of Sh7.50 for every ordinary share of Sh5.00,” the bank announced Friday.
BONUS SHARE ISSUE
If the proposal is approved by a virtual annual general meeting scheduled for July 24, the shareholders will also receive a bonus share issue.
The lender has proposed one share for every 10 fully paid up ordinary shares to shareholders registered at the close of business on April 27.
Several banks have decided to cancel their dividend payments altogether to improve their cash flows and support lending as the economic effects of the crisis continue to unravel.
NCBA Group Plc was the first to announce it would cancel its dividend payouts, instead offering a bonus share issue at the rate of one for every 10 shares held.
CAPITAL THRESHOLD
Equity Group also cancelled its proposed dividend payout of Sh2.50 per share or Sh9.5 billion dividend payout to its shareholders.
The board has maintained that the bank is within the capital and liquidity threshold as required by the regulator.“The board continues to assess the potential impact of the pandemic on the company, and to formulate and implement plans to abate this impact,” the board said.
