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KCB Group Plc shares plunged on Thursday, heading for the lowest level since August 2020 after Kenya’s second-largest bank announced it was cutting its proposed dividend.
The Nairobi-based lender posted 19% growth in net income to 40.6 billion shillings ($312.6 million) for last year, but the decision to lower the payout to 2 shillings per unit from 3 shillings a year earlier was below expectations, Nairobi-based Sterling Capital said in an emailed note. The stock slipped as much as 9.99% in Nairobi.
“We attribute the relatively low dividend payout to the Group’s low capital adequacy ratios, given that total capital to total risk weighted
assets dropped from 21.7% to 17.1% year-on-year,” according to Sterling Capital.
KCB Group is targeting to lower its non-performing loans ratio to 13% this year from 17.3%, currently the highest in Kenya’s banking industry, Lawrence Kimathi, finance director told investors.