20 NSE firms pay investors record Sh135bn dividends

The top-20 Nairobi Securities Exchange (NSE) #ticker:NSE firms by market value shrugged off a tough operating environment to pay shareholders more than Sh135 billion in dividends last year, a 42 percent increase on the 2017 figure.

The record payout was hugely supported by Safaricom and bank dividends, which helped to soften the blow on shareholders who incurred Sh419 billion paper losses from last year’s bearish performance of the stock market.

Most listed firms have been under pressure from shareholders to draw fat dividend cheques to compensate for depressed capital gains on the stocks. Only insurance group Britam did not pay dividends of the 20 biggest-listed firms, while KenolKobil #ticker:KENO -- which is in the process of delisting from the bourse -- has not publicly released its financials.

Safaricom’s #ticker:SCOM total payout rose 69 percent to Sh74.92 billion in the year ended March. The telco declared a final dividend per share of Sh1.25 and an additional special distribution of Sh0.62 per share for the year. In banking, most of the listed lenders shrugged off the rate cap impact to pay out record dividends as profitability increased.

KCB Group #ticker:KCB , Equity Group #ticker:EQTY , Co-operative Bank #ticker:COOP, NIC #ticker:NIC , Stanbic Bank #ticker:CFC , Diamond Trust Bank #ticker:DTK and I&M Bank #ticker:IM paid a cumulative Sh42.1 billion in dividends, up 12 percent from the Sh37 billion that they paid out the previous year.

During the period, the banking sector’s total pre-tax profits grew 12.3 percent to a record high of Sh152.3 billion, surpassing the previous earnings peak reported before the introduction of interest rate controls.

The rise in profit came despite the Central Bank of Kenya twice lowering the maximum interest chargeable on customer loans in an environment of constrained flow of credit to the private sector.

Seven listed banks increased their dividend payout during the financial year ended December last year, lifting investors’ fortunes. The largest lender, KCB, is set to pay Sh10.7 billion in dividend, up 17 percent from the Sh9.2 billion it paid the previous year. This is after it posted a 21.8 percent jump in net profit. Equity Group, the second bank in profitability, retained its payout at Sh7.55 billion although its profit grew five percent to Sh19.8 billion.

Its closest rival, Co-operative Bank, increased its dividend payout by 25 percent to Sh5.8 billion. The lender’s shareholders have already approved the Sh1 per share payout, the largest since joining NSE in 2008.

The top shareholder in the bank, Co-op Holdings Co-operative Society, was presented with a Sh3.78 billion dividend cheque last week, becoming the largest payout from the bank in 11 years. “This year’s Sh1 dividend matches the entire initial investment by the co-operative movement in the bank, thereby enabling them to recoup their investment in full,” the bank said last week.

Standard Chartered Bank’s #ticker:SCBK 17 percent jump in net profit to Sh8.1 billion saw it raise total dividend per share to Sh19, surpassing the Sh17 per share payout of the previous year. The total value to be paid out amounts to Sh6.53 billion, up from Sh5.84 billion paid in 2017.

A dividend rise was also replicated by Barclays Bank of Kenya, which revised its dividend policy from Sh1 to Sh1.10 per share last year.

“We rewarded shareholders with a 10 percent increase in dividend pay-out, totaling approximately Sh6 billion. This is our way of sharing our financial successes with our shareholders,” the bank said on the increment.