2024-02-10 12:55:00
(Agence Ecofin) – SGBC begins the dividend announcement period with a return of 9.6% for its shareholders. Although this will primarily benefit its key shareholder, the Société Générale group based in France, there is little chance that this will result in a significant increase in the stock market value.
Société Générale Côte d’Ivoire initiated the shareholder remuneration season on the Abidjan Regional Stock Exchange, by announcing a total dividend of 53.48 billion FCF). This sum translates into a net dividend of 1,547.1 FCFA per share ($2.54), following application of a tax rate of 10% in accordance with Ivorian tax legislation on dividends.
On Friday February 9, 2024, the share price closed at 16,100 FCFA, which equates to a yield of 9.61%. So far, this remuneration is the highest offered by the bank, majority owned at 71.8% by the French group Société Générale and around 8% by Allianz subsidiaries in West and Central Africa.
According to historical data from the Ecofin Agency, the level of shareholder remuneration is the highest observed since 2014, both in absolute value and in return.
In 2019, the bank experienced its lowest point with a dividend of 202 FCFA, but has since adopted an increasing policy of remuneration for its shareholders.
In 2023, the bank’s decision to distribute dividends was supported by a comfortable profit reserve, amounting to just over 198 billion FCFA at the end of December, and a net margin of 97 billion FCFA. This situation is the result of robust financial performance and reduced expenses.
« The Net Banking Product experienced a significant increase in 2023, reaching 253,286 million FCFA, an increase of 17.8% compared to 2022. This increase is mainly due to a solid performance of the net interest margin, increasing of 22.5% compared to 2022, and strong growth in service commissions and income from market activities, up 10.5% compared to 2022. This increase in income is based on the expansion of various banking professions, which posted solid performances throughout the year “, declared the bank in a financial press release.
SGBC looks to the future with confidence and plans to meet the requirement to increase its own funds, in accordance with the new directives of the Central Bank, by increasing its share capital to 20 billion FCFA. To do this, it plans to draw on its reserves, which currently amount to more than 210 billion FCFA.
However, it is unclear whether this announcement will lead to a significant rise in the stock price, which has only risen 0.31% year-to-date, marking its slowest pace since 2019. Despite a return above 9%, SGBC remains below the top 25 remuneration on the BRVM, which is currently 11.8%, according to calculations by the Ecofin Agency.
Also, although the bank has increased its reserves and reduced its expenses, it still needs to clarify the “other liabilities” line on its balance sheet, which increased by 72.6% to reach 81.13 billion FCFA. Finally, a reading of the bank’s future cash flow prospects leads to the conclusion that despite a price-to-earnings ratio of 5.15x its current value is higher than it should be, by at least 120%.
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