Equity Group has halted its proposed dividends payout of a total of 9.4 billion, due to the fears of the global Covi-19 pandemic.
The news is a shocker to the investors since this is the first time the bank has skipped dividends since listing on the Nairobi Securities Exchange back in August 2006. The country’s second-largest bank is the latest bank to hold or postpone cash distribution to its shareholders after Standard Chartered Bank Kenya and National Commercial Bank of Africa.
The bank has restructured its Sh92 billion or 25.1 percent of its loan book due to the Covid-19 effects on the global economy and it has said the proposed dividend was announced during a better time but it needs to be shelved.
“Accordingly, the board has passed a resolution withdrawing the proposed dividend recommendation and instead will be recommending to the shareholders that no dividend is paid for the financial year ended 31st December 2019.” a statement from the bank read.
Equity bank, therefore, advised its shareholders and other investors to exercise caution when dealing with its ordinary shares on the Nairobi Securities Exchange, the Uganda Securities Exchange, and Rwanda Stock Exchange.
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Shareholders expected their pay from the bank on July 24 as per the record of June 12
According to the Business Daily, the bank has also got hold of the cash since it is motivated by its commitment to spend Sh 10 billion to acquire a 66.5% stake in DRC-based Banque Commerciale du Congo.
The bank has, however, become the country’s largest lender to skip dividends payment in modern history. On the other side of the coin, Co-op Bank showed its confidence by paying its Sh 1 per share or Sh 5.8 billion dividends on April 23.
KCB Group is also working on the payout of its final dividend of Sh2.50 per share or Sh 8 billion dividends on or before July 3.
