Traditional dividend payers such as KCB, Equity, Co-operative Bank of Kenya and NCBA are all promising to distribute part of the profits to shareholders. Banks needed just seven months this year to earn the profits they made the whole of last year, new data shows.
And now they are promising shareholders bumper dividends as the year closes.
Investors last year had to contend with dividend freezes or cuts as banks, unsure of the extent of the Covid-19 economic fallout, went into cash preservation mode. The mood has since changed.
Traditional dividend payers such as KCB, Equity , Co-operative Bank of Kenya and NCBA are all promising to distribute part of the profits to shareholders.
This is welcome news for shareholders given that lenders were the most consistent and largest dividend payers among listed firms—besides Safaricom—before coronavirus disrupted the pattern. READ MORE
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The planned dividend payouts are on the back of Central Bank of Kenya (CBK) data that shows the banking sector’s pre-tax profit from Kenyan operations rose by 63.1 per cent to Sh145.48 billion in the nine months to September.
The profits had by July overtaken the Sh112.8 billion that the lenders made the whole of 2020.
The nine-month earnings also surpass the pre-pandemic levels.
Now industry executives are confident that investors will be in for increased dividend payouts when the lenders release their full-year results in March next year.
The sentiments are motivated by higher earnings, increased loan repayments and reduced economic uncertainty following the lifting of Covid-19 containment measures, including curfews and lockdowns.NCBA Group Chief Executive John Gachora last week announced a 2.6 times jump in the bank’s nine-month net profit to Sh6.52 billion, pledging to pay dividends.“Our dividend frequency has been to pay an interim and final dividend, we don’t intend to change,” he said.“And if we continue with this performance, which I think we will, I don’t see the reason why the board will not recommend a dividend at the end of the year.”The lender in October paid Sh0.75 per share, amounting to Sh1.24 billion as an interim dividend.Mr Gachora said the uncertainty brought about by Covid-19 had cleared, and now “we have a good view about 2021 and where it is going,” raising prospects for a final dividend payout.NCBA will join Equity Bank, which is also expected to end a two-year dividend freeze as profits soar.The lender, which saw its […]