Queen wrote:VituVingiSana wrote:Queen wrote:Angelica _ann wrote:Ericsson wrote:[quote=Ericsson]To get a good effect of COVID-19 on the financials
Q1--7bn
Q2--4.9bn
Q3--7.8bn
Nine months profit 19.7bn
Total Assets ksh.933bn
Great performance under the circumstances, 1T here we come.
How much did the cancelled dividend pay-out contribute to the Q3 performance? Nothing to celebrate here. Who is fooling who?
The 10bn or so was used to buy the bank in DRC. That's a capital investment vs a P&L item.
Of course, there is a benefit to Equity Bank i.e. it doesn't need to borrow (Tier 2) to fund the purchase.
Thought when they were cancelling the payout, they clearly indicated that they did so to cushion themselves (conserve cash) against the effects of Covid on their bottomline.
Spending the dividend cash to buy the DRC Branch, if indeed that is the case, must have been either an afterthought or poor planning on their part since they had already declared the dividend.
Let us just say the so called 7.8B declared profit came from the 9B accrued from the cancelled dividend. If the dividend had been paid out, in reality, there would have been a Q3 loss to the tune of 1.2B. For me this is simple and clear.
See the link below which explained how the dividend cash was to be expended:-
https://www.businessdail...63718-qsnb18/index.html[/quote]
The bank is his,shareholders can go hang themselves.Anchor shareholders like Norwegian investment fund are looking at capital gains which they can then cash out in future.
Let's now see if the investment in DRC was a wise one.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle