National Commercial Bank (NCB) reported bad news for investors on two fronts on Thursday when it released its full year results to September.
Not only was profit down, which was expected as a result of the write down of investment emanating from the NDX debt swap earlier in the year, but the final quarter results fell well below what was expected, from 92 cents in the June quarter and $1.10 in September 2012, to just 71 cents in the last quarter. The banking group chopped the final dividend payment for the year as well from 64 cents last year to just 16 cents. The latest announced dividend will be paid on December 12. The company’s pay-out ratio is just 18 percent, well below last year’s pay-out ratio of 34 percent and the company’s stated policy.
This year, NCB’s total payment will be 63 cents per share versus $1.40 last year unless they declare another one before year end, which they have done in the past.
In November last year, a dividend of 64 cents was paid compared to 34 cents paid at the same time in 2011. The dividend pay-out ratio for the 2012 financial year to September amounted to 27% and for the 2011 financial year 25.7%, compared to 42.2% for September 2010.
In August, NCB paid a dividend of just 8 cents, on May 24, a dividend of 16 cents per share was paid and 23 cents in March. The August payment represents a decrease from 17 cents paid in 2012 while the May 2013 payment represents a decrease from 21 cents paid in May last year. The March payment compares to 38 cents paid in January 2012.
The cut and carving of dividend payments from one period to the next is in keeping with an unpredictable policy the company has been executing even after repeating a previously announced policy fairly recently. The execution is in stark contrast with a very consistent and predictable policy of Scotia Group and many other companies on the stock exchange.
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[…] Profit also got a $281 million hit from receivership expenses, an increase over the amount spent in 2012 of $172 million. Technical, consultancy and professional fees reached $1.093 billion and is up from $846 million in 2012. Some of these fees would probably relate to the IPO issue as well. The impact of those exceptional charges helped in the directors cutting the dividend payment. […]