Bank investors face dividend cut as bad loans cover rise

Listed banks have nearly doubled the provisioning for non-performing loans in their books over the past one year, pointing towards reduced or flat dividends for shareholders in 2016.

The 11 listed lenders have reported a combined increase of Sh11 billion to Sh25 billion of loan-loss provision in their profit and loss statements — equivalent to an 80 per cent rise— between September 2015 and September 2016. This means that the amount of profit allocated to dividends will go down.