Capital Markets

StanChart bonus shares begin trading

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Standard Chartered Bank Kenya shareholders during its 2017 Annual General Meeting at the Safari Park Hotel in Nairobi. PHOTO | DIANA NGILA | NMG

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Summary

  • The lender had announced the bonus share plan to reward shareholders after halving its final dividend for the year ended December 2019 to Sh7.5 per share from the earlier declaration of Sh15 per share.
  • It had paid an interim dividend of Sh5 per share on October 24, 2019.
  • StanChart said the slashing of the final dividend, which lowered the total payout to Sh12.5 per share from Sh20 per share, was done to preserve capital and prepare for uncertainties brought by the Covid-19 pandemic.

Standard Chartered Bank of Kenya #ticker:SCBK Tuesday issued an additional 34.3 million ordinary shares worth Sh5.3 billion on the Nairobi Securities Exchange, satisfying its bonus stock programme.

The lender had announced the bonus share plan to reward shareholders after halving its final dividend for the year ended December 2019 to Sh7.5 per share from the earlier declaration of Sh15 per share.

It had paid an interim dividend of Sh5 per share on October 24, 2019.

StanChart said the slashing of the final dividend, which lowered the total payout to Sh12.5 per share from Sh20 per share, was done to preserve capital and prepare for uncertainties brought by the Covid-19 pandemic.

The company said it had restructured loan facilities worth more than Sh22 billion as customers whose incomes have been hurt by the coronavirus disruption applied for financial relief.

StanChart initiated the bonus share plan to make up for the dividend cut (which has seen it save Sh2.5 billion), offering shareholders an opportunity to boost their cash returns by selling the additional stock on the Nairobi bourse.

Stock brokers yesterday updated client accounts to reflect the bonus share which was implemented at a rate of one for every 10 shares held, according to NSE’s market data.

The bonus shares have no impact on investors’ stakes in the company. They are, however, expected to increase the stock’s liquidity besides a potential price reset.

StanChart capitalised Sh171.7 million to issue the bonus shares with a nominal or par value of Sh5 apiece.

The additional shares have raised the volume of outstanding stock to 377.8 million units from the previous 343.5 million units.

They also lifted the company’s market capitalisation to Sh58.4 billion yesterday compared to Sh53.1 billion on Monday.

The bonus shares and the final dividend accrued to investors who were on the register on April 27, 2020.

The lender’s parent company Standard Chartered Plc says it will not pay an interim dividend for the six months ended June 30, 2020 and it remains to be seen whether that policy will cascade to the local subsidiary.