This archive report was first published on 4 August 2020.
On Tuesday, August 4, 2020, Standard Chartered Bank of Kenya issued 34.3 million ordinary shares worth Sh5.3 billion on the Nairobi Securities Exchange (NSE), satisfying its bonus stock programme.
The bank had announced the bonus share plan in response to halving its final dividend for the year ended December 2019 to Sh7.5 per share from Sh15 per share.
StanChart had paid an interim dividend of Sh5 per share on October 24, 2019, and the slashing of the final dividend was done to preserve capital and prepare for uncertainties brought by the Covid-19 pandemic.
The company had restructured loans worth more than Sh22 billion as customers whose incomes have been hurt by the coronavirus disruption applied for financial relief.
By issuing the bonus shares, StanChart aimed to make up for the dividend cut, saving Sh2.5 billion in the process, and offering shareholders an opportunity to boost their cash returns by selling the additional stock on the Nairobi bourse.
Stock brokers updated client accounts to reflect the bonus share, which was implemented at a rate of one for every 10 shares held, according to NSE’s market data.
The bonus shares have no impact on investors’ stakes, but are expected to increase the stock’s liquidity and potentially reset its price.
