Equity Bank punishes shareholders citing COVID-19
In March this year Equity Bank announced a 14% increase in profits after tax for the financial year that ended December 31st 2019. The profit was shs 22.6 billion compared to shs 19.8 billion it had made for the year ended December 31st 2018. “With a 14% growth in earnings per share of Kshs.5.93 up from Kshs 5.22, the Board of Directors have proposed a 25% enhanced dividend payout of Kshs.2.50 up from Kshs.2.00 per share”, Equity Bank reported in a press release announcing the juicy profits. Sadly, the announced dividends will now not see the light.
Equity Bank has given the reason for taking a u-turn on the dividend payout as COVID-19 pandemic, the very reason it ought to pay out the dividends to shareholders without holding back; the very reason it could have used to find ways of cushioning shareholders from the impact of COVID-19.
“Accordingly, the board has passed a resolution withdrawing the proposed dividend recommendation and instead will be recommending to the shareholders that no dividend is paid for the financial year ended 31st December, 2019. 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 the Rwanda Stock Exchange”, said a statement Equity Bank sent to news rooms.
Late last month some reports circulated online alleging that the bank had also taken a move to lay off around 60 workers citing reduced earnings due to COVID-19. Around the same time, Equity Bank was reported to have donated a cumulative shs 1.1 billion to COVID-19 relief. These moves only speak of the bank’s policy to sympathise with the public at the expense of its home ground.
As Equity Bank punishes shareholders, those who tooks loans are being treated with some kind gloves. The bank recently restructured a shs 92 billion (25%) worth of loans, where some of the borrowers will only have to pay back the interest on loans in the meantime.
