By Equity Group Holdings has withdrawn its recommendation of a Ksh9.5 billion dividend payout to its shareholders.
The Board of Directors of Equity Group Holdings Plc has withdrawn its recommendation of a Ksh9.5 billion dividend payout to its shareholders. The withdrawal of the dividend payout speaks to the Board’s assessment of risk, post balance sheet date of December 31, 2019, and of the Group’s approach to prudent risk mitigation and management.
Equity Group Holdings has withdrawn its recommendation of a Ksh9.5 billion dividend payout to its shareholders
The COVID-19 global health pandemic has led to a great lockdown which has induced a complex and multi-faceted global crisis of health, economic, and social challenges of an unprecedented magnitude. The pandemic’s effects have created a significant drop in the global GDP, and a substantial loss of employment leading to an economic recession in which economists are projecting will evolve into a global depression worse than the Great Depression of the 1930s.
The Board is encouraging 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 and capital, and to not just survive the crisis but to be ready to thrive in the New Normal.
By withdrawing the recommendation for a dividend payout the Board is exercising financial prudence so as to conserve cash to enable the Group to respond appropriately to the unfolding crisis in terms of supporting its customers and to be able to direct cash resources to potential opportunities that may arise as economies in which Equity Group Holdings operates begin to recover.
Dr. James Mwangi, Equity CEO and Managing Director
“If the economic crisis mutates into a financial crisis, Equity Group will be well placed to weather the challenge with a strong capital base, strong liquidity and an agile balance sheet that improves its leverage, and would allow the financial services group to shield and accommodate its customers throughout this period of uncertainty, “said Dr. James Mwangi, the Group CEO, and Managing Director.
He added, “However, should the crisis not play out as anticipated, the Board will explore various options and make suitable recommendations that will enhance shareholder value.”
With this approach, the Group leadership and management can focus on strategically positioning the business, in order to protect and preserve its customer base through loan accommodations and rescheduling/restructuring to enable them to go through the prevailing turbulence while at the same time preserving cash to shore up the financial revival and growth of its customers’ businesses post the COVID-19 crisis.
The Board continues to evaluate the potential impact of the pandemic on the Group and to formulate and implement strategic plans to mitigate any effects, and will, in the usual manner ensure that it keeps the shareholders and other stakeholders informed.
Equity Withdraws Proposed Dividend Declaration And Payment Due To Market Uncertainty
“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. Mwangi,
He added “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”
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