Banks dominate dividend yield as NSE hits new high

LISTED banks dominated top dividend yields for listed companies in 2025, taking six positions in the top 10 list, according to the Nairobi Securities Exchange.

High yields for investors are linked to the sector's strongest performance, especially in the first nine months of the year, with combined pre-tax profits rising 10 per cent to Sh269 billion and after-tax earnings growing 10.8 per cent to Sh205 billion.

KCB Group generated the highest interest income minus cost of funds at Sh104.3 billion, followed by Equity Group at Sh93.6 billion. Other banks showed particularly strong momentum, with Co-operative Bank (22.8 per cent), NCBA (27.4 per cent), and I&M Bank (21.1 per cent) all posting interest income growth exceeding 20 per cent.

Standard Chartered delivered the highest dividend per share at 15.1 per cent, followed by Stanbic Bank at 11.5 per cent, while Cooperative Bank Group gave investors a dividend return of 10.4 per cent per share.

Even though BAT, Kapchorua Tea, KenGen, and Liberty briefly interrupted the dominance, KCB posted a dividend return of 8.1 per cent while Absa and I&M tied at 7.1 per cent to close the top list.

The Nairobi bourse blinked green in the week ended January 8, with total market capitalization going beyond the Sh3 trillion mark after reporting low activities in the first week of the year.

The NASI, NSE 25 and NSE 20 share price indices increased by 2.95 per cent, 3.29 per cent and 2.62 per cent, respectively, during the week. Market capitalization, total shares traded, and equity turnover increased by 2.95 per cent, 145.9 per cent and 186.0 per cent, respectively.

Bond turnover in the domestic secondary market increased by 77.1 per cent to Sh33.2 billion) after a sharp drop at the start of the year.

In the money market, Kenya’s forex reserves fell by $10 million in a week to $12.38 billion (Sh1.59 trillion) or equivalent of 5.3 months of import cover.

Although the Central Bank of Kenya did not give reasons for the sharp drop, it insisted that reserves remain adequate and meet the statutory requirement to maintain at least four months of import cover.

The Treasury bill auction of January 8 received bids totalling Sh31.3 billion against an advertised amount of Sh24 billion, representing a performance of 130.3 per cent. Interest rate on the 182-day Treasury bill remained stable while interest rate on the 91-day and 364-day Treasury bills declined marginally.

During the Treasury bond auction of January 7, the reopened 20-year and 25-year treasury bonds received bids totaling Sh71.5 billion against an advertised amount of Sh60.0 billion, representing a performance of 119.2 per cent. 

Out of the total bids, CBK accepted Sh60.63 billion, showing strong confidence among Kenyans in state securities. 

The 20-year bond, FXD1/2019/020, with about 13.2 years remaining to maturity, attracted bids totalling Sh23.36 billion, with the government accepting Sh20.29 billion.

The 25-year bond (FXD1/2022/025), with 21.8 years to maturity, was more popular, attracting bids worth Sh48.18 billion, out of which Sh40.34 billion was accepted.

According to a CBK, investors will earn an average interest rate of 13.26 per cent (20-year bond) and 13.76 per cent (25-year bond) with fixed coupon rates of 12.873 and 14.188 per cent, respectively.