Friday, April 1, 2022

Top Banks Pay Ksh.43 Billion Dividends As Profits Rise By 75 Per Cent

 


By Kepha Muiruri For Citizen Digital

Top Kenyan banks have declared dividends totalling to Ksh.42.7 billion for the year ended December 31, 2021 on the back of a 75 per cent jump to net profits.

The dividend payout by nine of listed Kenyan banks is 185 per cent higher than the short-handed Ksh.15 billion payout in 2020 when most lenders skipped the payout having taken a cash preservation stance.

Equity Group has declared the highest dividend in nominal terms at Ksh.11.3 billion ahead of KCB with Ksh.9.6 billion and Absa Bank Kenya at Ksh.6 billion.

Meanwhile, Co-operative Bank will pay dividends of Ksh.5.9 billion, NCBA Ksh.3.7 billion, Stanbic Holdings Ksh.2.9 billion, I&M Ksh.2.5 billion and DTB Ksh.838.8 million.

Only Housing Finance has skipped the annual dividends ritual in the period.

The combined payout by the eight banks round off to a 33 per cent distribution of full-year earnings.

The nine banks posted a combined profit after tax (PAT) of Ksh.129.5 billion up from Ksh.73.8 billion in 2020.

Where banks made their money

The near doubled earnings are largely attributable to improving income in the year with total operating income rising by 13.5 per cent to Ksh.451.9 billion from Ksh.398.1 billion previously.

The higher income is on the back of a 15.8 per cent growth in net interest income and a 9.2 per cent jump to non-interest funded income which points to increased returns from lending and greater income from the digitization of services for the banks.

Net interest income for the nine banks stood at Ksh.296.9 billion while non-interest funded income (NIFI) rounded off to Ksh.154.8 billion.

Meanwhile, the banks have shed 9.3 per cent in costs to Ksh.268.7 billion from Ksh.296.3 billion.

The greater part of the cost reduction has been made off lower loan-loss provisioning costs which saw a 45.3 per cent haircut to Ksh.58.7 billion from Ksh.107.4 billion in 2020.

During the year, the listed banks marked a 14.8 per cent growth in assets to Ksh.5.297 trillion from 4.614 trillion.

This includes a Ksh.2.747 trillion loan book which was up by 12.3 per cent from Ksh.2.446 trillion a year earlier.


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