Listed banks hold onto billions of shillings in divided payouts 

Listed commercial banks will hold back billions of shillings in dividend payments for the period ended December 2021 following a directive by Bank of Uganda requiring such financial institutions to continue withholding discretionary, dividend and bonus payments.
This is the second year commercial banks have not paid dividend and discretionary payments following a directive by the Central Bank on March 24, 2020 directing them to suspend such payment due to the need to stock up enough liquidity buffers to insulate them again Covid-19 related shocks.

It had been hoped that the suspension would be lifted due to relative stability in the banking sector, however, Bank of Uganda last month directed that banks should hold back on dividend payments due to a volatile economic environment characterized by high fuel prices, disruption in supply chains and rising inflationary pressures.    
 
According to an analysis of individual listed commercial bank financial results, it is estimated that banks will continue holding on close to Shs160b as they await for a way forward from the Central Bank. 
This comes amid indications that the banking industry was more profitable during the period ended December 2021 compared to same period in 2020. 
For instance, Stanbic Bank has continued to hold onto Shs110b it has declared as dividend payout for the period ended December 2020. 

Bank of Baroda will also continue to hold onto the Shs25b it had declared to payout in 2020 and another Shs25b it had intended to payout in 2021. 
On March 30, during presentation of the Stanbic financial results, Mr Hannington Wasswa, the Bank of Uganda director commercial banking, said the Central Bank was still instituting the Basel II framework for commercial banks, which requires them to hold capital for different risks that are being experienced or are threatening to reoccur. 
Some of these risks are credit, market, and operational, consistency risks. You need to hold adequate capital,” he said but did not indicate when the suspension will be lifted. 

The suspension, seeks to allow banks stock up enough capital for operational needs until when the economy has fully recovered from the impact of Covid-19 and price shocks. 
Therefore, during the period ended December 21, some banks, despite returning a large profit have not declared dividend pay outs. 
For instance, Stanbic, which made an impressive profit of Shs269b, said in March that payment of dividends for 2021 would depend of guidance from the Central Bank in regard to its 2020 decision to payout Shs110b, which was still under review. 
  
Bank of Baroda, whose profits after tax grew from Shs83.32b to Shs90.05b had declared a dividend payout of Shs25b in addition to Shs25b declared in 2020. 
However, the bank pegged the two payments on guidance from the Central Bank, which remains pending. 
Not declared           
KCB and Equity, which are both cross listed banks from Kenya, despite being profitable, did not indicate how much they would payout, while dfcu, as a group paid out Shs17.8b during 2020 but did not recommend any payment for the period ended December 2021. 
During the period ended 2021, dfcu reported a drop in profits, which dropped to Shs13.2b down from Shs24.3b in 2020.