CRDB Bank shareholders have endorsed a dividend increase of 60 per cent as the government regards the bank as the country development strategic partner.
At the 24th annual general meeting (AGM) yesterday the shareholders in one voice endorsed a dividend increase to 8/- for last year from 5/- paid in the previous year.
The 8/- per share translates into a dividend of 20.9bn/-, up from 13.1bn/- paid in 2017.
During his presentation, CRDB Group Chairman, Ally Laay said the bank’s net profit rose to 64.1bn/- in 2018 from 36.2bn/- in 2017.
“The bank looks forward to leveraging in its broad branch network and digital channels to improve customer experience and increase value to shareholders,” Mr Laay told shareholders on the future of the bank.
He also said the bank would maintain positive growth and address emerging challenges. “We need to be more aggressive, innovative and ag- During the shareholders’ seminar Prime Minister, Kassim Majaliwa (pictured) said the government regarded the bank as a strategic bank for the country’s economic growth.
"With a good governance record… we (government) will continue supporting the bank as a strategic bank for development growth… I will also be one of CRDB Bank’s shareholders,” Mr Majaliwa said.
The shareholders later approved the 8/- dividend, but raised a concern that was still low and more efforts should be made to increase it. CRDB Group Chief Executive Officer, Abdulmajid Nsekela (pictured) said based on this year’s first quarter good performance indicted that this year’s dividend could increase.
“The key goal is to sustain the first quarter profitability…in this way the dividend will increase,” Mr Nsekela explained.
He said the bank recognised the impact of technology as a way of improving efficiency, convenience and flexibility for customers, including utilising mobile banking to make rural customers access bank services.
“Currently, alternative channels are making up to 85 per cent of the bank’s transactions, meaning most of them are performed outside its branches.
This cuts operational costs,” Mr Nsekele said. Mr Nsekela also said they were targeting low interest deposits to reduce interest expenses and increase profit margins. CRDB Finance Director, Fredrick Nshekanabo said they expected to perform well at the end of the year.
“We target to increase profitability in this year,” Mr Nshekanabo noted.
Last year, CRDB became the first bank in the country to automate International Financial Reporting Standard 9 (IFRS 9). IFRS 9 brought significant changes to the accounting of impairment and measurement of expected credit losses.
Sector-wise, banks improved their credit management practices to reduce levels of non-performing loans (NPLs) to 10.4 per cent last year from 11.9 per cent in 2017.
According to Mr Laay, the banking sector’s net profit rose to 273.2bn/- in 2018 from 208.9bn/- in 2017. The AGM was preceded by a seminar to equip shareholders with issues pertaining to ownership and stock market investment.