Co-operative Bank of Kenya #ticker:COOP has become the first bank to announce it will next week pay Sh5.86 billion dividend ahead of annual general meetings (AGM) that have been postponed in the wake of coronavirus.
The bank says it will pay Sh1 per share dividend to April 23, an earlier date compared to last year when it made the shareholder payouts in June.
With the AGMs uncertain following restrictions on mass gatherings for fear of coronavirus infections, the lender has opted to pay dividends without receiving approval at the shareholder meeting.
This is in line with the advice from the Capital Markets Authority (CMA), which on April 3 allowed firms to pay dividends without approval from shareholders.
“With the current Covid-19 challenges, the need to release the much-needed funds to the grassroots in the over 15-million-member co-operative movement and in line with CMA guidelines, the bank is progressing to make the dividend payment for ratification at the next AGM,” said the bank in a notice.
Co-op Bank becomes the second Nairobi Securities Exchange-listed firm to announce that it will pay dividend ahead of an AGM after agricultural firm Kakuzi issued similar guidance.
The payout offers much-needed relief to the shareholders at a time the pandemic has interfered with business activities leading to job cuts and unpaid leaves that have left homes with cash flow challenges.
Co-op Bank board said the dividend would be ratified when it will hold the AGM.
The payout will see top shareholder, Co-op Holdings Co-operative Society Limited with a stake of 64.56 percent pocket Sh3.79 billion, while CEO Gideon Muriuki will get Sh117.7 million for his two percent stake.
Amarjeet Baloobhai Patel and Baloobhai Chhotabhai Patel, who are the seventh-highest shareholders will receive Sh20.2 million for their 0.34 percent stake.
Co-op’s net profit grew 12.4 percent to Sh14.3 billion last year, lifted by strong growth in non-interest income.
Acting CMA chief executive Wycliffe Shamiah said the dividends would be paid subject to the Nairobi Securities Exchange-listed firms internal policies and approvals.