Diamond Trust Bank (DTB) #ticker:DTK has resumed paying dividends after a hiatus in 2020, offering shareholders a payout of Sh3 per share for the year ended December 2021.
The bank reported a 20.33 percent jump in net profit after minority interests for the year to Sh3.9 billion. The net earnings were boosted by interest income from investments in government securities, which was up 21.9 percent to Sh15.1 billion in the period.
It also kept the growth of operating expenses in check, seeing them rise by a marginal one percent or Sh215 million to Sh19.88 billion.
Its total payout of Sh838.89 million in dividends is, therefore, equivalent to 21.4 percent of its net income for the period.
This is double the 11.1 percent payout ratio it recorded in 2019 when it paid shareholders a total of Sh755 million or Sh2.70 per share.
The payout ratio for 2021 is the highest the tier one lender has paid its shareholder in 10 years, having averaged just under half of that in the intervening period.
“The dividend payout recognises not just the performance we had in 2021 but also in making sure that we have an equitable balance between the return that we provide to the shareholders and the money that we will need to invest in the future so that we achieve our strategy of being socially and economically relevant,” said DTB finance director Alkarim Jiwa.
“We are making sure that we have adequate reserves as well so that if opportunities arise on the mergers and acquisitions front, we are well placed to be able to fund these key strategic initiatives,” said Mr Jiwa.
Banks have generally raised their dividend payouts this year after reporting much-improved profitability in line with the general recovery of the economy last year after its Covid-19 led recession in 2020.
Eight out of nine tier-one lenders which have announced their financial results for 2021 have raised their cumulative dividends to Sh49.24 billion, from Sh16.9 billion in 2020.
They had withheld dividends in 2020 in order to conserve capital amid Covid led uncertainty, which saw their profits fall sharply.