Friday, February 25, 2005

Capital Flight

Notice how foreign Banks pay a higher percentage of their earnings as dividends than local banks?
Barclays Kenya: Earned 18 shillings per share, paid dividend of 14 per share (78%)
Standard Chartered: EPS 6.75, Div 6.5 (96%)
Diamond Trust EPS 1.3. Div .7 (53%)
NIC EPS, 3.1, div 1.4 (45%)

The reason? This is how they repatriate profits abroad to their parent banks.
So as a shareholder, you‘ll get a higher year-to-year dividend payment with a foreign bank stock on the NSE.


daktari said...

looking at how much money barclays make here in the uk i guess most of the profits are from african branches.Its unheard of here to see banks spending all that on dividends.lakini tutafanya nini?

Anonymous said...

HSBC's 10 billion pround profit boggles the mind

Anonymous said...

Nonsense about repatriation! Like a well run business they need to figure out if they need the "extra" cash or not. The goal of BBK or SCBK is to make as much as they can without killing the golden goose.

What is the point of reinvesting in Kenya if they do not require to expand?

KQ is skimpy with dividends coz they need to expand BUT banks are becoming more efficient. They have built most of their "physical" facilities. The major expenses are HR & software! This they fund from income. Also note that banks have non-cash expenses like depreciation! Apart from maintenance (a current expense item), the depreciation provides cash flow they use to upgrade their systems!

Mike said...

ways to make money
is easy. ways to make money


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