Listed lender KCB #ticker:KCB has tripled its dividend payout to Sh9.64 billion for the year ended December 2021, while retaining Sh24.5 billion to finance new acquisitions and grow its business in Rwanda and Kenya.
The bank reported a 74 percent jump to Sh34.09 billion in net earnings for the year, driven by lower provisions for bad debts and higher income from loans.
KCB declared a final dividend of Sh2 per share, or Sh6.43 billion, bringing the total shareholder payout to Sh3 a piece or a cumulative Sh9.64 billion. The lender had paid an interim dividend of Sh1 in January.
The dividend is equivalent to 28 percent of the bank’s new earnings, up from 16.4 percent last year but lower than the 43 percent it paid in 2019.
KCB Group chief executive Joshua Oigara said that the lender sought to strike a balance between rewarding shareholders while preserving cash to weather geopolitical risks and supporting growth through new investments, including a potential entry into the Congo DRC market.
“We have increased our dividend three-fold and it is well within our ambition this year. But as you go forward into next year, you do expect that dividends should go to 45 percent of our total earnings, which is what we have done before,” said Mr Oigara.
“However, we do have some investment projects that we are looking at [such as] the consolidation of the bank in Rwanda and we also have conversation today about our potential entry into DRC.”
Banks had cut their dividends last year as they preserved cash in the wake of Covid-19 economic hardships, which triggered business closures, layoffs and pay cuts.
The lender has loosened the purse strings with higher dividend payouts this year amid the ongoing economic recovery and heightened business activity.
KCB said it was seeking new investments to grow market share in Eastern Africa, hence the need to retain capital.
The Group completed the acquisition of Rwandese Banque Populaire du Rwanda Plc (BPR) from London-listed financial services firm Atlas Mara Limited in July last year and has started integrating it with KCB Bank Rwanda into a single banking business.The Rwanda acquisition and a 13.5 percent growth in loan book to Sh675.5 billion, have helped it grow its total asset base by 15.4 percent of Sh151 billion to Sh1.14 trillion— the first time the assets crossed the Sh1 trillion mark.The bank’s total income also crossed the Sh100 billion mark for the first time, growing to […]
