DTB signals higher dividend payouts

Diamond Trust Bank (DTB) branch in Nakuru. FILE PHOTO | NMG

DTB Group says it expects to make increasingly larger dividend payouts in the coming years as a means of rewarding shareholders even as it continues to retain capital for expansion.

The Nairobi Securities Exchange-listed firm joins Co-op Bank to signal higher dividends as banks record strong profit growth amidst economic recovery from the earlier slowdown that was brought by the Covid-19 pandemic.

DTB is set to pay a dividend of Sh3 per share next month on the results for the year ended December 2021 after skipping a distribution the year before.

“We anticipate that dividend payouts will progressively increase in the years ahead as we continue to realise our aspirations to pivot DTB as a top-tier digitally-driven Bank in East Africa,” the bank says in its latest annual report.

“In this connection, your board will continue to be deliberate about achieving an equitable balance between rewarding shareholders and conserving capital to fund the significant investment and expansion plans being chalked out to realise these ambitious growth expectations.”

DTB’s upcoming dividend, totalling Sh839 million, represents a payout ratio of 21.4 percent. It is among the banks that have significant major headroom to lift cash payouts.

Co-op Bank has indicated that it will pay a higher dividend for the year ending December when it expects its earnings to have grown substantially.

The bank has maintained a dividend payout of Sh1 per share from 2018 to last year.

DTB reported a 20.33 percent jump in net profit after minority interests for the year ended December 2021 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.

DTB’s new dividend payout ratio of 21.4 percent is double the 11.1 percent it recorded in 2019 when it paid shareholders a total of Sh755 million or Sh2.70 per share.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.