Equity Group Holdings Plc has backtracked its decision to make a Ksh. 9.5 Billion payment to stakeholders- By Gerald Gekara.
In a statement released on Tuesday, the board of management said that by withdrawing the recommendation for a dividend payout it is exercising financial prudence to conserve cash.
This is in anticipation of a financial crisis that may inturn hurt banking institutions. Through supporting its customers, it will be able to direct cash resources to potential opportunities that may arise as economies in which Equity Group Holdings operates begin to recover.
“The pandemic’s effects have created a significant drop in the global GDP, and a substantial loss of employment leading to an economic recession which economists are projecting will evolve into a global depression worse than the Great Depression of the 1930’s.“ Said the statement
“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 CEO.
“If the economic crisis mutates into a financial crisis, Equity Group will be well placed to weather the challenge with a strong capital base, strong liquidity and an agile balance sheet that improves its leverage, and would allow the financial services group to shield and accommodate its customers throughout this period of uncertainty,“ said Dr. Mwangi.