EQUITY GROUP WITHDRAWS PROPOSED DIVIDEND DECLARATION AND PAYMENT

Equity Group has withdrawn its recommendation of a Kshs. 9.5 billion dividend payout to its shareholders. The decision was made by the board of directors after an assessment of risk, post balance sheet date of December 31, 2019 and the group’s approach to product risk mitigation and management.
Beginning this year, owing to the Covid-19 pandemic, the global economic outlook has deteriorated. To that end, the International Monetary Fund (IMF) recently revised the outlook to negative 3.0% of the Gross Domestic Product (GDP) growth rate from the initial projection of 3.3%. In 2019, the global economic growth was 2.9%. However, IMF projects that if the pandemic fades in the second half of 2020 and if the policy actions taken around the world are effective in preventing widespread bankruptcies, extended job losses and system-wide financial strains, global growth could rebound to 5.8% in 2021.
“The Equity Group Holdings board took a conservative approach that recognizes the emerging unquantified risk of the pandemic and opted to preserve capital in the face of the prevailing uncertainty,” said Dr. James Mwangi, the Group chief executive officer and managing director. On a positive note, he gave a reassurance that should the crisis not play out as anticipated, the board will explore various options and make suitable recommendations that will enhance shareholder value.