By Albert Nangara
Company share dividends are, for many investors, a vital part of the stock market landscape. Dividends are important for investors looking for income, such as as part of a retirement planning strategy.
Zimbabwe Stock Exchange-listed financial institution NMB Holdings Limited declared a dividend of ZWL 45 cents per share for the six months ended 30 June 2022 payable in respect of all the ordinary shares of the company. However, shareholders will have the option to elect a cash or scrip dividend.
“The ratio of allotment for the scrip dividend shall be one (1) for every thirty-eight (38) shares held. The conversion price of the scrip dividend is ZWL 1,700 cents which was the market price as at 24 August 2022, being the date the directors approved the dividend. This dividend will be payable in full to all shareholders of the companycompany registered at the close of business on 7 October 2022,” read a corporate announcement.
The payment of the dividend will take place on or about 4 November 2022. The applicable shareholders’ tax will be deducted from the gross dividends.
Further, the shares of the company will be traded cum-dividend on the Zimbabwe Stock Exchange up to the market day of 4 October 2022 and ex-dividend as from 5 October 2022.
The forms of election with the full details and terms of the scrip/cash dividend offer will be mailed to shareholders on 14 October 2022 and the last date of receiving the forms of election is 28 October 2022.
From the expert’s mouth to the journalist’s ears, choices are based on available information. So will one choose to elect a scrip dividend if they don’t know what it is? Of course, this is a rhetorical question. But just in case, stock dividends are less common than cash dividends. Instead of a cash payment, this is where a company issues extra shares to its shareholders. For example, shareholders would receive an extra share of NMB for every 38 already held.
A “scrip” dividend is when a company offers to pay a stock dividend instead of cash. The company issuing the scrip dividend then gives shareholders a choice: cash or extra shares.
Meanwhile, NMB Holdings Limited said it would be scaling up interventions in the export sector as part of a broad plan to increase forex-indexed income.
In its financial statement for the period ended June 30, 2022, NMB revealed that focus would be devoted to such sectors as horticulture and manufacturing.
“The bank has been growing foreign currency-denominated income both on interest and non-interest income. We are focusing on key export sectors such as horticulture, agriculture, mining and manufacturing,” NMB chief executive Gerald Gore revealed.
The group achieved an operating income of $10.4 billion, up from $5.7 billion achieved in the comparative period. This was spurred by a significant increase in interest income and continued growth in fees and commission income.
Total assets increased by 8.01% to close the period at $69.41 billion largely responding to inflation and movements in the exchange rate.
Loans and advances closed the period at $22.83 billion, up 4.34% from December 2021 levels.
“The group continues to take a measured approach to risk, as evidenced by the strong asset quality with an NPL (non-performing loan) ratio of 1.22% compared to 1.39% as at 31 December 2021. The net charge for expected credit losses was $259 million for the period under review. Deposits and other liabilities grew by 4.47% from December 2021 levels,” the firm revealed – Harare