DTB chairman Linus Gitahi (right) and CEO Nasim Devji during the launch of the lender's 67th branch at Sarit Centre, Westlands in 2022. FILE PHOTO | NMG
DTB Group has raised its dividend payout by 66 percent to Sh5 per share for the year ended December, joining other listed lenders in making record payments to shareholders.
The bank increased the dividend from the Sh3 per share paid for the previous year. The new payout, amounting to Sh1.39 billion, will be dished out around June 15 to shareholders who will be on record as of May 12.
DTB had earlier signalled that it would progressively raise its dividend payout over the years as a means of rewarding shareholders even as it continues to retain capital for expansion.
The new dividend amounts to a payout of 23 percent of net profit in the review period, rising from 21.4 percent the year before.
DTB reported a 55 percent jump in net income to Sh6 billion on the back of higher interest and non-interest income.
The company’s total interest income rose 18.1 percent to Sh40 billion while non-funded income including fees and commissions rallied 45 percent to Sh9 billion.
DTB’s loan book expanded 15 percent to Sh253.6 billion while investment in government debt securities went up 7.1 percent to Sh133.1 billion.
Banks have in recent months benefitted from rising rates on new auctions of T-bills and bonds.
The rising rates have, however, generated paper losses on their portfolio of the fixed income securities bought earlier when rates were lower.
DTB’s interest expenses rose 23.4 percent to Sh17.1 billion as customer deposits grew 16.9 percent to Sh387.5 billion.
Operating costs rose 11 percent to Sh22 billion, with staff costs among the items that increased the most.
The bank cut its provisions for bad debt by Sh416.3 million to Sh7.1 billion even as gross non-performing loans expanded by Sh2.1 billion to Sh32.2 billion.
The higher dividend by DTB is the latest indication that investors in listed banks are set for record cash returns after booking lower income in the 2020 and 2021 financial years.
Lenders blamed the reduced payouts at the time on lower profits and the need to be more conservative in the wake of the economic uncertainties occasioned by the Covid-19 scourge.
Co-op Bank increased its dividend payout by 50 percent to Sh1.5 per share for the year ended December, marking the second-highest growth in cash returns among listed lenders that have published their results.
Absa Bank Kenya enhanced its payout by 22.7 percent to Sh1.35 per share or an aggregate of Sh7.3 billion.
Standard Chartered Bank Kenya on the other hand increased its dividend by 15.7 percent to Sh22 per share or Sh8.3 billion.
KCB Group bucked the trend, cutting its payout for the review period by a third to Sh2 per share amounting to Sh6.4 billion.
