Equity Holdings has withdrawn its initial proposed dividend payout of Sh9 billion (Sh2.50 per share), pointing out that there is a need to conserve money during the coronavirus pandemic.
Equity has restructured Sh92 billion of its loan book as a result of the coronavirus effects on the economy. It stated that the proposed dividend was declared when the economy was good, but now it needs to be shelved.
“Accordingly, the board has passed a resolution withdrawing the proposed divided recommendation and instead will be recommending to the shareholders that no dividend is paid for the financial year ended 31st December, 2019,” said Equity in a statement. “Therefore, the shareholders of the company and other investors are advised to exercise caution when dealing in the company’s ordinary shares on the Nairobi Securities Exchange, the Uganda Securities Exchange and Rwanda Stock Exchange.”
The Bank, which is the second-largest lender in the country, is skipping payment of dividends for the first time since listing on the Nairobi bourse.
Other than the increased need to follow government directives on measures of slowing down the spread of the virus, Equity’s move to conserve money has been sparked by its commitment to spend Sh10 billion to buy 66.5 percent shares in DRC-based Banque Commercial du Congo.