Stanbic Holdings has disclosed a dividend payout policy of up to 65 percent of net earnings, signalling scope for higher returns to shareholders on the back of four consecutive years of increased distribution.
Stanbic Holdings Chief Executive Joshua Oigara said in an interview that the group has a policy of distributing between 60 percent and 65 percent of its net earnings to shareholders. The policy means that the group has some headroom left to raise distribution further to hit 65 percent.
“We have a very robust dividend policy that our dividends should be between 60 percent and 65 percent. That is our sweet spot. We are very clear that we don’t need to be keeping significant capital when we have a very strong parent,” he said.
Stanbic Holdings is owned by South Africa’s Standard Bank, which is the largest bank in Africa with an asset base of 3.4 trillion rand (Sh26.84 trillion).
Mr Oigara said the backing from Standard Bank means Stanbic’s dividend decision is not influenced by key investment plans like acquisitions.
“We have a very strong parent, and so if we need capital for our businesses, it will not be a challenge. The thinking that you needed to keep your capital in the organisation to wait for opportunities is one thought. It is not the only thought. We come with a strong parent who has huge capabilities to invest across the continent,” he added.
The firm joins a small group of companies that have publicly disclosed their dividend distribution policy in a market where many remain silent, often varying payouts depending on investment plans and the operating environment.
Several companies listed on the Nairobi Securities Exchange have publicly disclosed dividend policies.
However, many avoid committing to a fixed payout ratio.
Safaricom’s dividend policy provides for the distribution of at least 80 percent of the net income as dividends, while BAT Kenya maintains a high payout policy, sometimes exceeding its net income in a particular year.
In the banking sector, Equity Group introduced a dividend policy with a wide range of between 30 percent and 50 percent of net earnings, but has on several occasions distributed below this range.
Stanbic has raised its dividend per share for 2025 to Sh22.35, made up of an Sh3.80 interim and Sh18.55 as final distribution, even as net profit remained relatively unchanged at Sh13.72 billion.
The new distribution, amounting to Sh8.83 billion, is the highest in the history of the company and is more than double the Sh9 that the lender paid in 2022.
Net profit remained flat in a period both the net interest income and non-interest income dropped. Net interest income reduced to Sh24.08 billion from Sh24.34 billion while non-interest income dropped to Sh14.43 billion from Sh15.4 billion.
