By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- Shareholders of FBN Holdings Plc on Thursday approved the sum of N3.26 billion dividend payout for the 2014 audited year end; translating to a dividend of 10 kobo and a bonus of one share for every 10 held.
This figure is less than the N1.10 dividend proposed by the board of directors for the 2013 financial year, which amounts to N35.895 billion.
Bello Maccido, group chief executive officer (GCEO), of FBN Holdings Plc, explained on Thursday to shareholders that the drop in dividend was due to the reduction of the dividend the group received from its subsidiaries, including First Bank of Nigeria.
According to him, FBN Holdings retained profits because of the increased capital requirement of the CBN as a result of the adoption of Basel II capital accord in 2014.
“The group was negatively affected by the increase in Cash Reserve Requirement (CRR), losing N68 billion revenue in 2014 as a result,” Maccido affirmed.
“FBN has reduced its pay-out ratio and retained substantial portion of profit to boost capital which impacted the capacity of FBN Holdings to pay dividends. With the retention of N79.6 billion, we are confident that the capital adequacy ratio is adequate for business in the short to medium term,” the FBN Holdings GCEO added.
However, shareholders of the Holdings Company complained that the dividend offered in the review period was too small and called for increased dividend, they also urged FBN Holdings to from next financial year pay interim dividend so that investors could have access to cash.
Boniface Okezie, the president, Progressive Shareholders Association of Nigeria (PSAN), who spoke to InvestAdvocate said the payments being made by FBN Holdings to the CBN, Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC) was outrageous. ‘These payments are too much for banks to pay good dividends to their shareholders, we may be forced to challenge them in the court of law over these fees,” Okezie affirmed.
According to him, without such payments to the regulators, investors would be receiving a higher dividend.
On his part, Sunny Nwosu, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), urged the board of FBN Holdings to ensure that their decision to retain profit would amount to greater dividend for the shareholders.
Nwosu advised that it would be good for shareholders to receive interim dividend by next year to augment the 10 kobo and bonus of one share for every 10 held by shareholders of the holding Company.
A review of the 2014 audited yearend report of FBN Holdings shows that profit before tax (PBT) inched up slightly to N92.9 billion compared with N91.3 billion in 2013, while profit after tax (PAT) grew to N82.8 billion from N70.6 billion in 2013.
