VARIATION

Stanchart Bank cuts 2019 shareholders' dividends

Blames Covid-19 pandemic

In Summary

•Board has recommended to the shareholders the payment of a final dividend for the year ended December 31, 2019 of Sh7.50.

•This is down from the Sh15 for every ordinary it had announced in March.

Standard Chattered Bank building along Kenyatta Avenue, Nairobi./FILE
Standard Chattered Bank building along Kenyatta Avenue, Nairobi./FILE

Standard Chartered Bank (Kenya) has adjusted its dividend payout to shareholders downwards, blamed on “economic crisis” brought about by the Covid-19.

The tier-one lender on Friday said the board has recommended to the shareholders the payment of a final dividend for the year ended December 31, 2019 of Sh7.50 for every ordinary share of Sh5.00.

This is down from the Sh15 for every ordinary it had announced in March , when it published its full year financial results for 2019.

The board had resolved to recommend to the shareholders of the company for their approval at the Annual General Meeting,the payment of a final dividend of Sh15.00.

The proposed final dividend was to be paid to shareholders registered on the company’s register at the close of business on April 27, 2020.

“The Board, after careful consideration of the events that have taken place since the said financial results were published, particularly the rapidly unfolding economic crisis that has come out of the Covid-19 pandemic, has decided to vary its recommendation,” Company Secretary Nancy Oginde said in a notice through the Nairobi Securities Exchange(NSE).

"and instead recommend to the shareholders the payment of a final dividend for the year ended December 31, 2019 of Sh7.50 for every ordinary share of Sh5.00.” she said.

The dividend will be payable to shareholders registered on the company’s register at the close of business on April 27 2020.

The Board has also resolved to recommend to the shareholders at the forthcoming AGM a bonus issue in the proportion of one new ordinary share for every 10 fully paid up ordinary shares to the shareholders registered at the close of business on April 27, 2020.

A virtual AGM is scheduled for July 24, 2020 which together with the bonus share issue is subject to regulatory approval.

“The Board fully recognises the importance of dividends to its shareholders. However, varying shareholder distributions at this time will allow the company to maximise its support for individuals, businesses and communities in which it operates,” the lender has said.

Whilst at the same time, the move will help in preserving strong capital ratios and investing to transform the business for the long-term, it said.

“The company is well capitalised and the action we have taken will further bolster the capital levels,” Oginde said, noting the bank's capital and liquidity metrics remain well above regulatory thresholds.

“The Board continues to assess the potential impact of the pandemic on the Company, and to formulate and implement plans to abate this impact, as well as ensure that shareholders are kept informed,” she said.

Its shares at the counter dropped 1.47 per cent on Friday to Sh167.50, moving 898,000 shares worth Sh151 million.

The bank registered a marginal 1.7 per cent increase in net profit in the year ended 2019.

Profit after tax increased slightly to Sh8.2 billion from Sh8.1 billion in 2018.

In the same period, the net operating income increased slightly, from Sh28.6 billion to Sh28.7 billion.

It had raised its dividend by 5.26 per cent to the final dividend of Sh15 per share, which was bringing the total payout to Sh20, up from Sh19 in 2019 and Sh17 the previous year.

StanChart CEO Kariuki Ngari in March said the bank had invested well in digitisation of its services.

During the year, the bank recorded a 6.2 per cent increase in total assets, with the asset value rising to Sh302 billion from Sh285 billion in 2018.

Loans and advances to customers increased eight per cent to Sh129 billion.

Total operating expenses of the bank reduced marginally, from Sh16.8 billion to Sh16.5 billion in 2019.