StanChart defies economic jitters, issues Sh11b dividend

StanChart's payout of Sh29 per share is 32% higher than the aggregate Sh8.31 billion paid out the previous year.  [Elvis Ogina, Standard]

Standard Chartered Bank Kenya (StanChart), a unit of UK banking multinational Standard Chartered, on Tuesday announced a record dividend payout totalling Sh10.96 billion, riding on earnings growth in the year ended December.

The total payout of Sh29 per share is 32 per cent higher than the aggregate Sh8.31 billion paid out the previous year by the Nairobi Securities Exchange-listed firm.

StanChart Kenya announced the higher cash distribution after its net earnings in the year to December grew by 15 per cent to Sh13.8 billion, riding on higher interest and non-funded income.

“The board will be recommending to shareholders at the forthcoming Annual General Meeting, a final dividend payment of Sh23 for every ordinary share of Sh5. An interim dividend of Sh6 was declared and paid in December 2023,” said StanChart Kenya Chief Executive Kariuki Ngari.

“This will bring the total dividend for the year to Sh29 per ordinary share, which is 32 per cent higher than the 2022 dividend.”

UK banking multinational Standard Chartered Plc, which owns 75 per cent of the Kenyan unit according to information on its website, will smile to the bank by taking home Sh8.22 billion in dividends.

StanChart Kenya’s higher earnings defied credit impairment charges, which grew by Sh2.1 billion, reflecting worsened loan repayments by some customers.

The lender’s operating expenses also recorded a jump by Sh3.1 billion or 20 per cent to Sh18.7 billion, eating into the bottom line.

“Impairment losses on loans and advances up by Sh2.1 billion, reflecting continued active management of the credit portfolio. Credit quality remained resilient, but we remain alert to a volatile and challenging macro-economic environment,” said the lender’s chief financial officer Chemutai Murgor.

StanChart is the second tier-one lender to announce its full-year results after Stanbic Holdings.

StanChart joins Stanbic Holdings, a subsidiary of South Africa’s Standard Bank Group recently announced a record dividend payout totalling Sh6.0 billion, riding on earnings growth in the year ended December.

Standard Bank holds 81.3 per cent of Stanbic Bank Kenya, setting it up for a mouthwatering Sh4.87 billion dividend payout.

The higher dividend payout by the lenders signals they are more optimistic about the future of the battered economy despite multiple headwinds such as stubbornly high inflation and a volatile shilling that has since made gains. The lenders say their improved profitability placed them in a position to pay the larger dividend while remaining well-capitalised to pursue growth.