Stanbic Holdings, a subsidiary of South Africa’s Standard Bank Group, Wednesday announced a record dividend payout totalling Sh8.19 billion, riding on earnings growth in the year ended December 2024.
The total payout of Sh20.74 per share is higher by more than a third of the aggregate Sh6 billion or the Sh15.35 per share dividend paid out the previous year by the Nairobi Securities Exchange-listed firm.
Stanbic, which is the Kenyan unit of Africa’s largest lender by assets, Standard Bank, announced the higher cash distribution after its net earnings in the year to December 2024 grew by Sh1.5 billion to Sh13.7 billion, riding on higher interest and non-funded income.
Standard Bank holds 81.3 per cent of Stanbic Bank Kenya, setting itself up for a mouthwatering Sh6.65 billion dividend payout.
“The Directors of Stanbic Holdings Plc have recommended a final dividend of Sh18.90, having paid an interim dividend of Kenya shillings one and eighty four cents Sh1.84 for each ordinary share of Sh5 on the issued and paid up share capital of the Company,” said the lender.
“If approved, the full dividend per share for the year ended 31 December 2024 will be Sh20.74 for each ordinary share of Sh5.”
The higher dividend payout by the lender signals it is more optimistic about the future of the battered economy despite multiple headwinds such as a slowing economy and weakened credit market that has seen bad loans soar and banks jittery.
The lender, however, signalled yesterday that the improved profitability placed it in a position to pay the larger dividend while remaining well-capitalised to pursue growth.
Stanbic Holdings is the first lender to announce its full-year results.
Analysts project its high payout trend is expected to continue as rival banks also announce their results in the coming days.
A payout boom by the lenders will be a welcome bountiful season for income-hungry shareholders to whom dividends are a vital source of income even as economic uncertainty rages. The Group posted a 27 per cent rise in interest income from Sh37.9 billion to Sh48.2 billion during the year under review on the back of a higher yielding asset book and investment portfolio. This was, however, moderated by a 93 per cent rise in interest expense that translated into a five per cent decline in net interest income.
During the reporting period, non-interest revenue decreased by 1.7 per cent owing to narrowed margins and the impact of a one-off significant transaction in 2023. The bank says this was, however, compensated by higher trading and transactional volumes. This resulted in a 3.8 per cent drop in total income.
Stanbic Bank Kenya and South Sudan Chief Joshua Oigara described the performance as robust.
“Our investments in technology, talent, and innovative business strategies have positioned us to deliver resilient earnings and create a positive impact across Kenya and South Sudan. We remain dedicated to partnering with our clients and shareholders to achieve sustainable, long-term growth,” he said.
Other subsidiaries of the banking giant also remained profitable, with Stanbic Bank South Sudan reporting a net profit of Sh176 million during the review period.
Stanbic Bancassurance Intermediary saw its net profit drop 19 per cent to Sh174 million, while SBG Securities, which handles brokerage and asset management, saw a drop of 87 per cent in net profit to Sh20 million.
“Eighty-seven per cent may look scary, but this is the business that intermediated that big transaction last year (2023),” said the firm’s Chief Financial and Value Officer Dennis Musau.
