NMB shareholders smiling all the way with Sh97 billion dividend hike

Dar es Salaam. NMB Bank Plc shareholders will be all smiles next week as the lender’s board of directors propose a 41 percent rise in dividend payments.

The NMB Bank Plc board chairman, Dr Edwin Mhede - says in the lender’s annual report for 2021, which was made public earlier this week - that owing to a strong performance and capital position, the board was proposing a total dividend per share of Sh193 for the year 2021.

This amounts to a total dividend of Sh96.728 billion.

The amount is also a 41 percent increase compared to the dividend per share of Sh137 that the bank’s shareholders shared last year (2021) from the 2020 profit.

The proposed dividend is subject to approval by the bank’s 22nd Annual General Meeting (AGM) which is slated for Friday next week (June 3, 2022).

The rise in dividend explains an epic increase in net profit for the bank in 2021 compared to 2020.

“The bank’s profitability continued to go from strength-to-strength, delivering profit after tax of Sh290 billion in 2021, up 41 percent year-on-year and setting another industry record. We also delivered a 21 percent shareholder return in 2021, up from 18 percent in 2020,” Dr Mhede says.

According to the bank’s chief executive officer, Ms Ruth Zaipuna, NMB Bank maintained its leadership position in 2021 by delivering a profit before tax of Sh414 billion and stellar performance across all the other key parameters.

She says the bank managed to grow the number of its clients to cross the five million mark in 2021. It also enabled them to conduct their banking tasks swiftly through digital means.

“Our investments in innovative delivery channels continue to play a critical role in widening financial inclusion….we continued to enhance NMB Mkononi, our mobile banking platform, to make it simpler and safer for our customers. The channel continues to see good growth in the number of users year on year and has continued to reach many customers who would have remained unbanked,” she says, adding that the number of agents also grew exponentially.

NMB also leveraged on its range of card-based payment solutions, including debit cards, credit cards, pre-paid cards, and QR codes as well as on partnerships with various merchants to enable cash-free payment solutions to drive digital inclusion.

According to Dr Mhede, the bank managed to surpass its targets across all the performance parameters, with customer deposits rising to Sh6.6 trillion against a target of Sh6.1 trillion while gross loans and advanced closed at Sh4.8 trillion against a budget of Sh4.7 trillion.

“The Bank surpassed revenue target by Sh85 billion to deliver Sh988 billion in total revenue against

budgeted revenue of Sh903 billion…Operating expenses were proactively managed to ensure reductions on property expenses and office expenses….,” he says.

Last year, NMB Plc shareholders approved a dividend payout of Sh137 per share, amounting to Sh68.5 billion, for the financial year ended 31st December 2020.

The amount was a 43 percent rise compared to a dividend payout of Sh48 billion paid for the year ended 31 December 2019.

The government owns a 31.8 percent stake in NMB Bank Plc while private investors own 25 percent slice via the Dar es Salaam Stock Exchange (DSE).

The National Investment Company Limited (Nicol) and the TCCIA Investment Company Limited own 6.6 and 1.7 percent stakes respectively while Arise BV of the Netherlands and Norway own the remaining 34.9 percent