Equity Bank resumes dividend pay-out
Equity Group Holdings Plc will resume payment of dividends for the year 2021.
Speaking during the Group’s Annual General Meeting, Equity Group Managing Director and CEO Dr. James Mwangi said last year’s move to withhold dividend pay-out was to preserve capital amidst the prevailing uncertainty.
“The Group is confident that the level of risk mitigation put in place during 2020 is sufficient to provide a buffer against uncertainty whilst improving earnings and the return outlook. The Board is now confident that the measures taken have borne fruit and the Group will be able to resume payment of dividend for 2021 as it has done consistently since the Company was listed in 2005,” said Dr. Mwangi.
The lender’s shareholders have adopted a policy that will guarantee a dividend payout of between 30 percent to 50 percent of its profit after tax beginning from the current financial year ending December 31, 2021.
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The formulation of the policy comes against the backdrop of the lender’s decision to withhold dividend payment last year because of the disruptive effect of the COVID-19 pandemic on its business.
The Group’s shareholders have also adopted new changes to reinforce the governance structures of the Group.
Equity Group Foundation will also have a board seat while shareholders with more than 12.5 percent shareholding will now participate directly by nominating a Director to the Board.
Speaking after the AGM, the Group Board Chairman Equity Group Holdings Plc (EGH Plc), Professor Isaac Macharia said, “the shareholders have demonstrated their confidence in the governance of the Group, and further strengthened the structures to ensure the Board is reinforced through diversified representation for effective oversight.”
Due to the pandemic, Equity Bank accommodated Ksh.171 billion of loans for customers whose repayment capacity was adversely impacted by the virus.
As of December 31 last year, Kshs, 40, billions of the restructured loans had resumed repayments and normalized.
However, Ksh.9 billion have been downgraded to nonperforming loans over doubts on the future viability and quality of loans.