Equity Group, Kenya’s major regional financial institution said its shareholders will go for the second consecutive year without dividends after the board on Monday froze the payout as net profits fell 11.6% to Sh20 billion(U$ 18,231,540).
Details indicate that the lender posted a drop in earnings from Sh22.39 billion booked a year earlier on the back of a five times jump in provisioning for loan defaults in appreciation of economic hardships facing borrowers in the Covid-19 environment.
Loan loss provisioning rose from Sh5.3 billion to Sh26.63 billion, piling pressure on the bottom-line despite growth in operating income.
Net interest income rose by 22.6% to Sh55.15 billion, while non-interest income grew 25% to Sh38.51 billion.
However, the board failed to recommend any dividend on this performance, extending the freeze to two years.
Equity’s last dividend payout was on the 2018 performance, with shareholders taking home Sh7.54 billion.