Stanbic Bank has said it will hold payment of dividends for the year ended December 31, 2019 until further notice following a directive from the Central Bank.
Early last week, while releasing the bank’s financial results in Kampala, Stanbic indicated the board had authorised a dividend payout of Shs110b for the period under review from Shs97.5b that was paid out in 2018.
However, in a March 24 circular, Bank of Uganda directed commercial banks to defer bonus and dividend payments on account of reserving enough capital for the growth of real economy.
“Capital reservation to support the real economy and absorbed losses should take priority over discretionary distributions like dividend [and] bonus payments. Therefore, all payments of discretionary distributions is deferred until further notice or until explicit authorisation is given by Bank of Uganda,” a circular signed by Dr Tumubweine Twinemanzi, the Bank of Uganda director supervision said.
Defer payment
Speaking in an interview, Mr Sam Fredrick Mwogeza, the Stanbic Bank chief financial officer, told Daily Monitor that whereas the Central Bank had already reviewed the bank’s results and approved dividends payments, the bank would defer payment of the same until further notice.
“Given the new directive issued we will engage with BoU to ensure alignment before any action is taken. We are confident that we are well-capitalised and hold sufficient liquidity buffers that make us well situated to support our customers and shareholders in this difficult time,” he said.
In the period under review, Stanbic Bank registered growth in private sector credit, which in 2019 grew to Shs 2.8 trillion from Shs2.5 trillion in 2018.
This represented a growth rate of about 14 per cent year, indicating increased appetite for credit
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