KCB Group is unlikely to issue a special dividend following the sale of National Bank of Kenya (NBK), according to a report from Sterling Capital. Instead, the proceeds from the sale are expected to be reinvested into the group for growth and strategic initiatives.
Here's a more detailed explanation:
Focus on Growth and Capital:
KCB Group's management has indicated that the NBK sale proceeds will be used to support ongoing growth initiatives and improve the group's capital position.
Dividend Policy:
KCB's dividend policy focuses on balancing shareholder returns with the need to maintain adequate capital buffers for strategic growth.
Capitalization:
KCB Group aims to strengthen its capital buffers, particularly in light of the NBK sale and its potential impact on the group's asset quality.
Asset Quality Concerns:
KCB Group has acknowledged asset quality issues, and the NBK sale is seen as a step toward addressing these concerns.
Regional Expansion:
KCB Group's strategy involves regional expansion, and the sale proceeds will likely be allocated to supporting this expansion.