- The board said the action was to conserve cash to enable the Group respond appropriately to the unfolding crisis in terms of supporting its customers.
- The bank was scheduled to pay the dividend on July 24 to shareholders on record as of June 12.
Equity Group shareholders will miss out on dividends for the first time after the board withdrew its recommendation of a Sh9.5 billion payout.
The board said the action aims at conserving cash to enable the Group to respond appropriately to the unfolding crisis in terms of supporting its customers.
“The Equity Group Board took a conservative approach that recognizes the emerging unquantified risk of the pandemic and opted to preserve capital in the face of the prevailing uncertainty,” said James Mwangi, the Group CEO and Managing Director.
The bank was scheduled to pay the dividend on July 24 to shareholders on record as of June 12.
Equity becomes the third bank to withhold dividends after NCBA Group and Stanchart withheld dividend payouts on similar grounds.
Further, the Board encouraged the bank’s customers to seek opportunities to innovate in the age of the pandemic and to keep looking for growth possibilities even in this trying time in order to preserve cash and capital.
“If the economic crisis mutates into a financial crisis, Equity Group will be well placed to weather the challenge with a strong capital base, strong liquidity and an agile balance sheet that improves its leverage, and would allow the financial services group to shield and accommodate its customers throughout this period of uncertainty,“ said Mwangi.
He added that should the crisis not play out as anticipated, the Board would explore various options and make suitable recommendations that would enhance shareholder value.
Mwangi said through this approach, the Group can focus on strategically positioning the business, in order to protect and preserve its customer base through loan accommodations and rescheduling/restructuring to enable them to go through the prevailing turbulence.
It will, he said, at the same time help in preserving cash to shore up the financial revival and growth of its customers’ businesses post the COVID-19 crisis.
Mwangi said the Board continues to evaluate the potential impact of the pandemic on the Group and to formulate and implement strategic plans to mitigate any effects and will keep its shareholders and other stakeholders informed.