Financial services provider, Standard Chartered Bank, has approved a final dividend of GH¢1.84 per share to be paid to its shareholders for the full-year period ended December 2021.

The figure, which translates to approximately GH¢247.9 million, is a 6.53 percent appreciation over the GH¢232.7 paid out in 2020 and represents 56.7 percent of the bank’s post-tax profit for the period.

It, however, falls short of the GH¢2.57 per share (GH¢346.3 million) initially proposed by the Board of Directors, which was knocked down by the Bank of Ghana (BoG).

In the wake of the uncertainty following the emergence of COVID-19, the regulator had issued a directive compelling banks and related institutions to suspend the declaring dividends for the 2019 and 2020 financial years, unless certain conditions were met.

Speaking at the 52nd Annual General Meeting (AGM) of the bank, Board Chairman, Dr Emmaniel Oteng Kumah, in his final address in that capacity – as he steps down in October, in line with regulatory guidelines – stated that despite tight macroeconomic conditions, the bank remains committed to maximising shareholder value and demonstrating it through improved dividend payment.

“We acknowledge that the operating period was challenging as we navigated the second year of the pandemic. However, our financial results show evidence of strong underlying business resilience in the face of uncertainty and a bank that is tracking well against its medium-term financial and social targets,” he added.

Chief Executive of the Ghana Stock Exchange-listed lender, Mansa Nettey, explained that a number of one-off factors contributed to the modest topline and bottom numbers.

Among them was a non-repeat of an extraordinary income of GH¢69 million in the preceding fiscal year, in addition to a reversal of Group support charges, which minimised costs in 2020 as well as rising inflation, which shot operating costs by 32.64 percent to GH¢382 million in 2021, she indicated.

She further stated that the bank’s return-on-equity of 26.6 percent and its profitability over the past five years, which has grown at a compound annual growth rate (CAGR) of approximately 12 percent, were better gauges of the trajectory of the bank.

Echoing the Chairman, she said: “Our profitability metrics and the value we give our shareholders remain robust with strong outcomes on return-on-equity and earnings-per-share. This gives us the confidence that we are making good progress on our strategic priorities.”

 Year in review

In the period under consideration, Standard Chartered grew its operating income moderately by 5 percent to close the year at GH¢1.02 billion.

Net interest income recorded a marginal 1 percent increase from GH¢641 million to GH¢646 million. It, however, fared better with its non-funded income, which improved by 11 percent year-on-year, from GH¢382 million to GH¢424 million.

“Impairment eased from a provision of GH¢59 million in 2020 to a recovery of GH¢6 million in 2021 aided primarily by provision release on legacy non-performing assets,” the bank indicated.

Pre-tax profit closed the year at GH¢695 million, a three percent YoY appreciation. However, the bank’s balance sheet remained robust, growing by 26 percent to close the year at GH¢10.12 billion.

It maintained a healthy Capital Adequacy Ratio (CAR) standing at 33.4 percent, significantly above the regulatory minimum of 11.5 percent, with earnings per share at GH¢3.23.

The bank remains heavy on its corporate business, which accounted for 70 percent of its portfolio. It however gave an indication that it seeks to expand its retail business, especially through the use of digital channels.

Managers of the Standard Chartered Bank, cited its post-tax profit of GH¢191mn – a 65 percent YoY improvement, robust non-funded income growth, and a lower-than-anticipated OpEx, in the first quarter of 2022, as further evidence that its strategies are working.

The bank’s ordinary shares (ticker: SCB) is currently selling at GH¢20.30, with a market capitalisation of GH¢2.74 billion.

Credit: B&FT online