Stanbic Holdings has raised its interim dividend by 60 percent to Sh1.84 per share on the back of a cash pileup and net profit for the six months ended June growing by 2.3 percent to Sh7.21 billion.
The interim distribution, set for next month, will amount to Sh727.4 million and is a growth from Sh1.15 per share or a total of Sh454.62 million that the group distributed on the performance of a similar period last year.
The 60 percent jump in the interim dividend was despite the net profit growing marginally by 2.3 percent to from Sh7.05 billion in the previous similar half-year.
Stanbic Bank Kenya and South Sudan Chief Executive Officer Joshua Oigara explained that the slowed pace of profit reflects the fact that the group last year earned Sh1.2 billion revenue from two key transactions, which have not recurred this year.
Stanbic Bank Kenya’s subsidiary, SBG Securities last year earned close to Sh1 billion revenue for mid-wifing the transaction in which British multinational Diageo acquired an additional 14.97 percent stake in East African Breweries Plc (EABL). The bank also benefited from a higher margin on foreign currency transactions.
The bank and its subsidiaries form part of the Nairobi Securities Exchange-listed Stanbic Holdings.
“If you remove the two big transactions last year from which we earned around Sh1.2 billion, our business is up by about 19 percent, which, for me, is commendable knowing the difficulties our clients are facing,” said Mr Oigara.
The lender will pay the dividend on or about September 27, to investors who will be in the company’s share register as at the end of September 2. Stanbic Holdings Chief Executive Officer Ptrick Mweheire said the decision to increase the payout was so as to not to hold too much idle cash.
“We do not like to hold on to excess capital. If we do not need the capital, we can always pay it out. We appreciate our shareholders for being supportive, and therefore we felt like it was worth it, if we do not need that capital to actually pay it out as a dividend...We have a very good trajectory in terms of our growth,” said Mr Mweheire.
The firm’s cash holdings nearly doubled to Sh111.6 billion and liquidity ratio at the bank hit a new high of 52.8 percent.
During the review period, Stanbic Holdings’ net interest income grew by 4.2 percent to Sh12.55 billion from Sh12.05 billion as loans and advances to customers hit Sh361.4 billion from Sh281.39 billion.
The group’s operating expenses dropped by 6.8 percent to Sh8.13 billion from Sh8.72 billion, helped by a 21.7 percent cut in provisioning for loan defaults to Sh1.96 billion.
Stanbic becomes the second lender to release its 2024 half year results, with others expected to do so before the end of the month. Victoria Commercial Bank went first on Tuesday, with its net profit dropping by 27.2 percent to Sh293.3 million.
