Stanbic Bank’s Sh1.5 billion shareholder pay-day
Stanbic Holdings has set a dual first becoming the first bank to issue its 2020 full year earnings while also announcing a final dividend of Sh3.80 a share.
The dividend pay-out translating to a cumulative KSh1.5 billion has come as a surprise to not just the lender’s shareholders but also observers and analysts.
With Stanbic Bank suffering the same burns from COVID-19 related disruptions like its peers, the lender would have been excused for letting go the commitment to shareholders.
As a matter of fact, many in its class already did so, varying or completely rooting out the settlement after the pandemic threatened banks capital and liquidity buffers after its entry into the country about a year ago.
For instance, NCBA substituted its 2019 shareholder payment for a bonus share issue, Standard Chartered trimmed its dividend by half while Equity Group pulled out of the payments entirely.
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As such Stanbic Bank would have skipped the dividend ritual without raising any eyebrows or face flinching.
Despite Group earning being down by nearly one fifth at KSh5.2 billion, the lender is expected to meet the commitment with the book closure date set for May 21, this year.
Stanbic is nevertheless making the rare dividend declaration without compromising on any of its stability metrics with both core capital and liquidity buffers remaining well above the regulatory thresholds.
According to Stanbic Bank Kenya Chief Finance Officer Abraham Ongenge, the special pay out signifies the lender’s extended anchoring of all its core players.
“We supported our clients, colleagues and communities. We also do need to think of how to support our shareholders as they are the people who have given us the investment to grow this organization,” he said.
The dividend pay-out further signifies the lender’s optimism for near-term business prospects as well as its confidence on its ability to re-invest towards its own growth.
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In the immediate, the dividend pay-out is expected to draw investor interest to the stock as the Nairobi Securities Exchange (NSE) participants attach themselves to profit opportunities ahead of full markets rebound later in the year.
Moreover, interest is expected to return to the NSE banking counter as Stanbic drives optimism for further dividend declarations before the end of the full year reporting period on March 31.
Banks were seen as unlikely dividend payers this year separating them from counters such as Safaricom and KenGen whose final pay outs are nearly guaranteed.
On Friday, Stanbic’ stock price climbed to Sh84.50 from Sh83 on Thursday in the aftermath of the full-year earnings disclosures.
To keep investors just as interested and to cover their NSE positions peer banks may just be forced to make provisions on dividend payments.