Shareholders for Standard Bank Malawi are wincing after the bank’s board directors resolved to declare an interim dividend of K500 million for the half year ended June 30, 2014. This is a decrease from the K2 billion which was paid in June 2013.
Malawi Stock Exchange (MSE)-listed Standard Bank Limited will pay an interim dividend of K2.13 per ordinary share in sharp contrast with the K9.37 per share paid last year despite the fact that it has managed a profit after tax of K6.12 billion this year up from 2013’s K5.67 billion profit.
“Profit after tax at K6.1 billion was 8% above same period last year. Total income grew 19% year on year on account of higher trading revenue and income on loans and advances to customers. Operating costs grew by 42% over same period last year triggered by general increases of prices of commodities. As a result, cost to income ratio at 39% was 6% above same period last year,” read the bank’s half year statements of results signed by chairman Rex Harawa.
The company’s reason for this is veiled further in the statement indicating that its long term strategy is to sustain and enhance return on equity by investing in capabilities that drive growth, reduce cost to income ratio, engagement of people and improve risk and compliance management framework.
Harawa says the interim dividend will be paid on 19 September 2014 to shareholders whose names will appear on the Register of Members as at close of business on 5 September 2014 and that the Register of Members will be closed from 5th to 8th September 2014 both days inclusive.
During this period, no share transactions will be conducted.
Standard Bank Malawi says it expects a lower interest rate environment to support economic growth in the second half of 2014 although the risk of rising inflation and interest rates remains and that pressure on inflation is expected to emanate from largely a weaker local currency as the lean season sets in early with tobacco revenues projected to be lower in the current season.
The bank also says the resumption of budgetary support has direct impact on exchange rate stability and that it also holds the key for the direction of interest rates in the medium term.Follow and Subscribe Nyasa TV :