Investors in the Standard Chartered Bank Kenya stocks will enjoy the highest return on their investment, an analysis of dividend payments by listed banks that have so far released their 2022 full-year earnings showed.
The dividend yield is a financial ratio showing the return an investor would earn from an investment solely on its dividend payments. The yield, which is expressed as a percentage, shows how much a company pays out in dividends each year relative to its stock price.
The Nairobi Securities Exchange (NSE) listed bank – whose share price was trading at Sh167 yesterday – will pay dividends of Sh22 per share after its net profits increased by 38 percent to hit Sh12.44 billion.
This translates to a dividend yield of 13.1 percent which is the highest so far of the five Tier-one banks that have announced their earnings for last year.
Co-operative Bank shareholders will enjoy the second-highest dividend yield of 12 percent. The lender’s stock was trading at Sh12.5 per share yesterday.
The bank will pay its shareholders a dividend of Sh1.50 per share which is an increase from the Sh1 per share it paid last year after earning Sh22 billion in net profits mainly attributed to a sharp growth of non-funded income.
Stanbic Bank shareholders will earn a dividend yield of 11.5 percent making its stock the third best rewarding among the five listed lenders that have released their 2022 earnings.
The bank – whose stock was trading at Sh109 per share yesterday - declared a dividend of Sh12.5 per share paid to its shareholders.
The dividend pay amounting to Sh4.98 billion is a 40 percent increase from the Sh3.56 billion that the bank paid its shareholders in the previous financial year.
This comes after the bank netted Sh9.05 billion in net profit up from Sh7.2 billion in 2021 driven by higher interest income.
On the other hand, Absa Bank Kenya shareholders will earn a dividend yield of 11.25 percent.
The bank’s share price was Sh12 yesterday. Absa Bank reported a 34.2 percent net profit growth in the year ended December 2022.
Following the good performance, Absa Bank raised its dividend payout to a record of Sh1.35 per share or a total of Sh7.3 billion.
KCB shareholders will however get the lowest dividend yield among the five lenders of just 6.45 percent.
KCB - whose stock was trading at Sh31 per share yesterday – cut dividends by a third despite its net profit rising sharply by 19.5 percent.
The bank will pay its shareholders a dividend per share of Sh2 amounting to a total of Sh6.4 billion.
The lender earned Sh40.8 billion in the financial year that ended in December up from net profits of Sh34.17 billion in the previous year.
Commercial banks’ earnings from foreign exchange trading in the financial year ended December jumped sharply on higher demand for the dollar amid widening margins.
A review of published financial performance results of five tier-one lenders as of Friday shows that the lenders earned Sh34.8 billion from trading in currencies in the review period compared with Sh20.99 billion in the same period the year before.
Kenya has been from last year battling a biting shortage of US dollars with banks selling forex at rates way above the recommended rates by the Central Bank of Kenya (CBK) amid huge demand, especially from importers.
The dollar shortage is being driven by rising dollar demand owing to increased shipments of fuel, electronics, food, raw materials, and equipment.
Further, traditional sources of dollar inflows such as agricultural exports and tourism have failed to keep up with demand.
