Equity Bank Won’t Make Any Dividend Payout This Year

Shareholders in Equity Bank will have nothing reflecting in their bank accounts as dividends for this year as a result of the ongoing fast-spreading Covid-19 that has hit hard on businesses.

The Board of Directors of Equity Bank has withdrawn the announcement that had been made, giving an okay for a dividend worth 9.5 billion shillings to be paid to shareholders.

“The Equity Group Holdings Board took a conservative approach that recognizes the emerging unquantified risk of the pandemic and opted to preserve capital in the face of prevailing uncertainty,” said Dr. James Mwangi, the Group CEO, and Managing Director.

According to Equity Bank, the decision to withdraw the dividend payout directive is to ensure that the group conserves cash in order for it to respond appropriately to the unfolding crisis in terms of supporting the customer.

The bank called on their customers to work towards preserving cash as much as possible “not just to survive through the pandemic but to adapt to the New Normal.”

Given that the dividend payout had already been announced, the withdrawal is not likely to go down well with the shareholders who were already waiting for the cash to hit their bank accounts after the announcement of the financial results.

Businessman Jimnah Mbaru thinks the decision by Equity Bank to withdraw the dividend payout was ill-informed, saying there was a better way to address the situation. “Equity Bank should have issued a script dividend in order to preserve cash instead of skipping the cash dividend previously announced. Shareholders would get the same dividend by selling the script shares on the stock exchange,” he said.