Equity Withdraws Proposed Dividend Declaration and Payment to Shareholders

Equity group holdings has withdrawn its proposed dividend declaration payout of Ksh 9.5 billion to its shareholders due to the COVID-19 health crisis, said a press release by the firm on Tuesday 26, 2020.

The Board of Directors of Equity Group Holdings Plc, the biggest bank on Nairobi Stock Exchange by market capitalization,  withdrew the recommendation to exercise financial prudence so as to conserve cash to enable it to respond to the unfolding crisis by supporting its customers and be able to direct cash resources to potential opportunities that may arise as economies in which Equity Group Holdings operates begins to recover.

“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 the prevailing uncertainty,” said Dr. James Mwangi, the Group CEO and Managing Director adding that “a strong capital and liquidity position gives us the strength and capacity to cushion our business and accommodate and walk with our customers during these challenging times.”

The move by Equity leadership and management aims at strategically positioning the business to protect and preserve its customers through offering loans while at the same time preserving cash to support the financial revival and growth of its customers’ businesses.

Further, the Board encouraged the Bank’s customers to seek opportunities to innovate in the age of the pandemic and to keep looking for growth possibilities even in this trying time in order to preserve cash plus capital, and not just to survive the crisis but be ready to thrive in the New Normal.

The COVID-19 global health pandemic has induced a complex and multi-faceted global crisis of health, economic, and social challenges thus creating a significant drop in the global GDP and loss of employment to many people leading to economic reduction.

Economists are also projecting that the economic recession will evolve into a global depression worse than that of the 1930’s.

The statement further noted the report by Monetary Fund (IMF) that shows the global economic outlook to be below 2.9% in 2019 from an initial projection of 3.3% to negative 3.0% of GDP growth rate, which they feel is optimistic.

The IMF also projected that if the pandemic fades in the second half of 2020 and if policy actions taken are effective in preventing widespread, bankruptcies, extended job losses, system-wide financial strains, and global growth could rebound to 5.8% in 2021.