Equity Group Holdings has resolved to withdraw Ksh9.5 billion dividend payment for the year ended 31 December 2019. The withdrawal of the dividend payout follows the Board’s assessment of risk, and of the Group’s approach to prudent risk mitigation and management.
The lender says the COVID19 pandemic has affected the global economy as well as Kenya’s economy hence the need to conserve cash to enable the Company to respond appropriately to the unfolding crisis.
The Equity Group Holdings Board took a conservative approach that recognizes the emerging unquantified risk of the pandemic and opted to preserve capital in the face of the prevailing uncertaintyDr. James Mwangi – Equity Group CEO and MD
The cash will enable the lender to respond appropriately to the adverse effects of COVID19 pandemic and to have cash resources for potential opportunities that may arise as economies begin to recover.
Further, should the economic crisis mutate into a financial crisis, Equity will be in a position to weather the effects with a strong capital base, strong liquidity and an agile balance sheet.
Other banks deferring dividend
Standard Chartered Bank Kenya said in a statement that the company will not pay the final dividend of KSh15.00.
NCBA on April 20th, 2020 announced that it was changing its earlier recommendation to pay a cash dividend and instead recommended to the shareholders a bonus share issue. In this case, shareholders will get a bonus share for every ten shares held. NCBA was to pay dividends amounting to KSh2.2 billion for the year ended 31 December 2019.