Equity Group Holdings shareholders have approved a Sh15.1 billion dividends payout for the financial year 2023. The decision was ratified at the group’s 20th annual general meeting held 26th June 2024.
This is the second year in a row that the group is paying out Sh15.1 billion in dividend to shareholders. The payout ratio is 36 percent which is higher than the previous year’s ratio of 33.6 percent which is in line with the Equity Group Holdings Plc Dividend Policy. The payout depicts a sustained return to shareholders amid an operating environment that’s grappling with volatility marked by inflation, widespread currency depreciation, and interest rate hikes.
“The Sh4 per share dividend amounts to a 36 percent payout of the Sh43.7 billion Profit After Tax or Sh11.1 earnings per share and dividend yield of 11.9 percent on the 2023 year-end closing share price of Sh33.65 or 800 percent on par value,” said Equity Group’s managing director and CEO Dr. James Mwangi.
The shareholders also approved other board proposals including the Group’s employees share ownership Trust Deed and Scheme rules. In the previous Annual General Meeting the shareholders approved the creation of Equity Group Employee Share Ownership Programme (EGH ESOP) and allocated 5 percent of the share capital to it. The trust deed will position Equity Group as an employer of choice in the various markets and sectors where it operates.
“The staff are the most valuable assets we have, and they are the ones that deliver the promise to our customer and the ESOP will attract and retain the right talent,’ said Equity Group chairman Prof. Isaac Macharia.
Other approvals include the creation of a banking holding company that will consolidate the activities of all the banking subsidiaries within the Group. Currently Equity Group operates banking subsidiaries in Kenya, Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo (DRC). Equity Group will now operate under four groups, the Banking Group, Insurance Group, Technology Group and the Foundation Group.
The shareholders gave directors the greenlight for the incorporation of a health insurance subsidiary to undertake health insurance underwriting in Kenya. The health insurance company will be a subsidiary of Equity Group Insurance Holdings Limited which already undertakes a life insurance and general insurance business in Kenya.
Further, they also ratified the Cogebanque acquisition which led to Equity Bank Rwanda being a respectable position two in the market with an 18 percent market share. This creates opportunity for the Rwanda economy as it can now support large transaction in the market.
Prof. Isaac Macharia told shareholders that driven by purpose, the Group has continued to support its customers to navigate the current harsh economic times characterized by volatility and uncertainty.
“From inception, we have sought to proactively support our customers through relevant, affordable and easily accessible services and products. We understand that behind every account or transaction is a unique individual or organisation with specific requirements and goals.”, he said.
Dr. Mwangi, said the Group performed well, reflecting a positive outlook, continued trajectory of growth and shared value creation. “We are now a systemic bank in East Africa, a region that has emerged among the fastest growing regions in the world. Our outlook remains positive, despite the challenging macroeconomic environment, Equity has adapted with agility and responsiveness to mitigate the challenging market conditions across the region. This reflects the strength of its leadership, the resilience of the employees, the anchored nature of our twin-engine business model, and the relevance of the Africa Recovery and Resilience Plan (ARRP).”
“We have made good progress through the year in attaining the key objectives under the Plan as we increased our client numbers to 19.6 million customers up from 17.7 million. In addition, the number of borrowing businesses increased to 0.3 million while borrowing customers stood at 0.84 million. Overall, we have made good stride in pursuing the Plan. As the ARRP is strongly hinged on unlocking the primary sector in Africa, a major concern for the Group in the year revolved around nature and climate change,” he added.