FINANCIAL MARKET : La Regionale Bank’s Dividends Drops in 2022
Since November 1, 2023, 40 % of the profits of the Regionale Bank have been distributed to shareholders against 60 % adopted by the general meeting held last June. The reduction in dividends is not appreciated by the shareholders of this financial institution.
In a press release signed on November 3, Beac, which acts as the sole Central Depositary (DCU) on the Cemac financial market announced the payment of dividend worth 64.447 million FCFA by the Regionale Bank for stock market shareholders, e.i those whose securities are listed at the Bvmac. The dividends represents a net coupon of 894 FCFA per share. An announcement that surprised more than one because the assembly of the credit institution held last June, approved a gratification of 1.5 billion FCFA of dividends for completed financial year.
Considering that the float (volume of shares listed on the stock exchange) is 7.12 % of the overall capitalization, it is 106.7 million FCFA which should normally be distributed to stock market shareholders after deduction of tax on income from movable assets. After reaching out to La Regionale, they explains that this cut was decided by the Central African Banking Commission (Cobac) which ultimately approves the amount of dividends to be paid.
« The general meeting held on June 24, 2023 adopted in its fifth resolution, subject to the approval of Cobac, the distribution of dividends for a gross amount of 1.5 billion FCFA, representing 60% of the distributable profit of 2.514 billion. By correspondence dated October 18, 2023, Cobac gave its approval instead for an amount of 1.0906 billion FCFA representing 40 % of the distributable profit. The board of directors, during its session on October 24, 2023, took note of the Cobac directive and decided to comply with it by making effective payment of said dividends from November 1, 2023 », indicates the bank in a press release.
The Regionale Bank does not explain the reasons that prompted the banking sector watchdog to demand this decrease but emphasizes that « the rest of the distributable profit could be distributed during subsequent financial years if Cobac gives permission ».
It must be said that In the Cemac credit institutions (Banks and microfinance) have been authorized to pay dividends this year, after 3 years of drought. In a correspondence sent on September 19, 2022 to credit and microfinance institutions, Maurice Ouanzin, the secretary general of Cobac announced that he was putting an end to the suspension of dividend payments within these entities.
The decision, which also concerns microfinance, was adopted in 2020 in the midst of the Covid 19 pandemic to allow taxable persons to continue financing the economy while being able to absorb certain losses related to the health crisis. Set for December 31, 2021, the initial deadline had been extended to June 30, 2022.
The distribution of dividends remains good news for shareholders even if the boards of directors often remain divided on the issue. They assume that by reinvesting its profits, the company woukd strengthen its position on the market ; which will be beneficial to shareholders over the long term.
S.N
