Standard Chartered Bank Kenya CEO Kariuki Ngari (left) and Chief Financial Officer Chemutai Murgor during the release of the 2023 financial results on March 12, 2024.
Standard Chartered Bank Kenya's dividend yield has grown to 17 percent, as most bank share prices fall after the close of books for final dividend payments.
The dividend yield shows the rate of cash return by comparing the dividend against the current share price, with falling stock prices benefitting income-focused investors in companies that maintain or raise their payouts.
Standard Chartered’s share price had fallen by 12.8 percent to Sh170.25 as of Thursday, from Sh195.25 on April 19, when the bank's books were closed for the payment of a final dividend of Sh23 per share-which is set to hit investor accounts on May 30.
The company had earlier paid an interim dividend of Sh6 per share, bringing its total dividend to Sh29 per share.
Banking sector stocks saw a significant rally in the lead-up to the book closure dates as investors moved to lock in dividends declared in the most recent year of operations to December 2023.
The bank share prices have however eased in the aftermath of the book closures, with investors having already locked in the expected dividend payout. Companies use the book closure date to identify the cut-off date for determining which investors will receive a dividend payment for the period.
I&M Group's share price has for instance fallen by 15.4 percent to Sh18.35 from the high of Sh21.7 on April 18 when it closed its books for the payment of a final dividend of Sh2.55 per share. This has resulted in raising I&M’s dividend yield to 13.8 percent.
Similarly, Co-operative Bank of Kenya's dividend yield has jumped to 12.5 percent with its share price having slumped by 14.5 percent to Sh12, from the high of Sh14.05 on April 29 when it closed its register for the payment of a final dividend of Sh1.5 per share.
NCBA Group and Absa Bank Kenya dividend yields have also improved to 11.1 and 12.6 percent respectively, following their book closures on April 30 as the stocks traded at Sh42.75 and Sh12.30 Thursday.
DTB Group, Equity Group and Stanbic Holdings, which currently have yields of 12 percent, 9.38 percent and 12.6 percent respectively, will close their registers for their final dividends on May 24 (for DTB and Equity) and May 17 (Stanbic).
The three stocks traded at Sh50, Sh42.6 and Sh121.75 respectively on Thursday. The dividend yield usually informs the return possible for an investor buying a stock while holding the payout or dividend per share at constant.
The financial ratio is usually crucial for investors hunting for dividend returns in the stock market.
Nine of the listed 11 banking counters declared dividends to investors for the period ended December 2023 with the only exception being HF Group and KCB Group.
The dividend yield ratio has an inverse relationship to the stock price, where a lower stock price will result in a higher dividend ratio when keeping the dividend per share at constant. This implies that investors will more often lock in a higher dividend yield when share prices are low than vice versa.
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