•Last year, Kenya’s banking sector recorded several mergers and acquisitions and more are predicted in the next two years as capital raising options diminish for smaller struggling lenders.
•Nigeria’s largest retail lender, Access Bank Plc, acquired Kenya’s Transnational Bank.
•The bank’s profits have been on a decline from Ksh168 million ($1.68 million) in 2015 to a loss of Ksh71 million ($710,000) last year.
•Loss-making Mayfair Bank, linked to politician Peter Kenneth, is being sold to a leading Egyptian bank, the Commercial International Bank.
Shareholders of Nairobi Securities Exchange (NSE)-listed companies, some of which are cross-listed on neighbouring countries’ stockmarkets, are from this month expecting to receive dividends on earnings made last year, putting a smile on investors’ faces amid the Covid-19 pandemic gloom.
The payments were made possible after the Capital Markets Authority (CMA) allowed the deferral of annual general meetings (AGMs) during the current restriction on public gatherings, giving board members the powers to declare and release dividend cheques.
Shareholders of regional lender KCB, which is cross-listed in Uganda, Tanzania and Rwanda, are set to get a final dividend payment of Ksh2.50 ($0.02) per share on April 27.
Equity Bank, whose shares are also traded in Rwanda and Uganda, has said it will pay its Ksh2.50 ($0.02) dividend per share in July, which will also see other firms such as Uganda’s utility firm Umeme (Ush 41.3,$0.01 per share, Kakuzi (Ksh 14,$0.14 per share), Diamond Trust Bank (Ksh2.70, $0.02 per share) wire cash to their shareholders.
Rwanda’s Bank of Kigali (BK), which is cross-listed on the NSE, will also get their pay cheques after the lender said it had opted for a video and audio conference call on May 20, to declare a first and final dividend of Rwf14.4 ($0.015) for the year ended December 31, 2019, payable on or about July 1 2020.
The firms will, however, be required to adhere to their respective dividend policies and secure all other relevant internal approvals, including making available the audited financial statements to the CMA, the NSE and the general public.
According to the CMA, board decisions pertaining to dividend payments, appointment of directors and appointment and remuneration of auditors will be subjected to the shareholders’ ratification at a later date.
“Board decisions on these matters will need to be tabled at the AGMs, once convened, for ratification,” said the Authority’s acting chief executive Wycliffe Shamiah in a statement.
Interim dividend
KCB had initially paid an interim dividend of Ksh1 on the issued and paid up share capital of the company bringing the total dividend for the year 2019 to Ksh3.50 ($0.03) per share.
Other listed firms such as Limuru Tea Plc and Co-operative Bank have announced they will pay dividends of Ksh0.7 and Ksh1 per ordinary share respectively in June.
The self-listed NSE announced payment of a first and final dividend of Ksh 0.08 ($0.0008) per ordinary share that was due for payment within 60 days of the date of the AGM.
The suspension of the shareholder meetings is in line with the government’s directive outlawing public gatherings including AGMs, religious congregations, weddings and funerals as part of measures to contain spread of the coronavirus.
“My view is that none of the companies as far as I know has deviated significantly from their historical dividend amount. CMA seems to have Okayed it and there has been no significant changes in major shareholders in listed companies and I can’t remember a time when an AGM resulted in proposed dividend amount being adjusted,” said chief executive of Kestrel Capital Ltd Francis Mwangi.
Domestic production
Kenya confirmed its first coronavirus case on March 13 and the pandemic has disrupted domestic production and supply chains as well as demand from the country’s main trading partners.
All Other East African Community member countries have also confirmed Covid-19 positive cases within their boundaries.
East African governments have introduced a series of economic stimulus including reduction of taxes to help support the economy.
Ordinary business transacted at AGMs include the declaration of dividends, consideration of financial statements, election of directors in place of those retiring and appointment of and fixing of the remuneration of auditors.
“The Authority is allowing the progression of some of the activities usually sanctioned during AGMs for listed companies,” said Mr Shamiah.
“Given the need to postpone AGMs, to help eligible shareholders access dividends during these difficult circumstances, the respective Boards of issuers of securities have been allowed to proceed to declare and pay the dividends to their shareholders.”
