NCB Financial Group changes stance; dividend consideration set for tomorrow
After a year of no dividend payment to shareholders accompanied by two publications to the relevant stock exchanges, NCB Financial Group (NCBFG) has advised that the declaration of a dividend will be considered at its board meeting set for tomorrow (April 29).
The financial group, which typically pays a quarterly dividend to its shareholders, was limited not only by the novel coronavirus pandemic pushing NCBFG into capital preservation mode, but also by the Bank of Jamaica’s (BOJ) dividend moratorium which restricted any payments to only those who owned less than one per cent of the company. Although all the other significant publicly listed financial companies paid dividends to shareholders owning less than one per cent, NCBFG said that it was unable to payout any dividends because of its inability to get the 13 shareholders owning more than one per cent to agree to a deferral of their payments.
Based on its assessment of the financial environment after a year, the BOJ removed its dividend moratorium request at the start of the month which meant that all outstanding dividends from 2019 and 2020 were now payable to shareholders. At the time, NCBFG had published a release on April 7, stating that it didn’t intend to recommend a dividend at its upcoming board meeting with reference to the BOJ’s statement on financial prudence to distribute capital to shareholders.
In a notice posted on the Trinidad and Tobago Stock Exchange last Friday, NCBFG has changed its stance with the company now considering the declaration of a dividend. Though this would be a possible signal that NCBFG might pay a dividend with respect to its second quarter, the decision is still left to the board on what they see as necessary for the regional conglomerate. A dividend on ordinary shares is not mandatory for any company. NCBFG paid its last dividend of $1 per share in March 2020 which equated to $2.47 billion. NCBFG as a standalone company received a 57 per cent increase from NCB Jamaica during its 2020 financial year which totalled $13.19 billion.
