Stanbic Holdings has increased dividend payouts by 40 percent after the net profit for the year ended December 2022 grew 26 percent to hit the highest level in the lender’s history.
Net earnings hit Sh9.06 billion from Sh7.21 billion posted in the preceding year as the interest income grew on increased lending and non-funded income rebounded.
The Stanbic board has, as a result, raised the dividend per share from Sh9 to Sh12.60 in what will mark its highest-ever payout.
Standard Bank Group East Africa regional chief executive Patrick Mweheire attributed the “exceptional” performance to improved growth across the five financial segments that Stanbic operates.
“We are extremely excited to be paying such a level of dividend. The operating environment remains challenging, but we are happy to see growth come back,” said Mr Mweheire.
The raised dividend per share will see shareholders pocket a total of Sh4.98 billion — an equivalent of 55 percent of the net earnings —compared with Sh3.56 billion paid in the previous year.
Stanbic, which has traditionally paid an interim dividend, skipped the payout when announcing half-year results and lumped it together instead.
Shareholders are expected to endorse the proposed payout during the annual general meeting.
During the review period, net interest income grew from Sh14.4 billion to Sh18.9 billion as loans and advances to customers rose by Sh37.5 billion to hit Sh266.83 billion at the end of December.
Non-interest income — mainly drawn from fees and commissions — rose from Sh10.62 billion to Sh13.14 billion to support the net earnings.
The group’s operating expenses, however, rose from Sh12.7 billion to Sh14.97 billion, partly on near doubling of provisioning for non-performing loans from Sh2.5 billion to Sh4.98 billion.
“We had some headwinds in some of our portfolios, which we continue to manage, but in line with IFRS 9, we had to make that provision,” said Dennis Musau, chief financial and value officer at Stanbic Holdings.