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By Mulengera Reporter

The Board of Directors of Equity Group Holdings Plc has shelved its earlier plans to pay out dividends amounting to a Ksh9.5bn (about UgShs336bn) to its shareholders over the Covid19 impact on the economy.

The largest bank on the Nairobi Securities Exchange by market capitalization, Equity says it decided to withdraw the recommendation to pay the dividends after its Board’s assessment of risk, post balance sheet date of December 31, 2019 and its approach to prudent risk mitigation and management.

The Group noted that the Covid19 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 Equity Group Holdings Board took a conservative approach that recognizes the emerging un quantified risk of the pandemic and opted to preserve capital in the face of the prevailing uncertainty,” said Dr James Mwangi, the Group CEO and Managing Director.

“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.”

Equity hopes it 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” if the current “economic crisis mutates into a financial crisis.”

“However, should the crisis not play out as anticipated, the Board will explore various options and make suitable recommendations that will enhance shareholder value,” added Mwangi.

The Bank’s Board has urged 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.”

For now, Mwangi says the Group leadership and management is focusing 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 Covid19 crisis.”

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