BOA Benin to Tap Reserves for Dividends Despite Profit Drop
TLDR
- Bank of Africa (BOA) Benin plans to draw from its reserves to maintain dividend payouts, despite reporting an 8.74% decline in 2024 net profit
- Net income fell from 21.53 billion FCFA ($35.49 million) in 2023 to 19.65 billion FCFA ($32.39 million) in 2024, impacted by regional pressures such as the devaluation of the Nigerian naira
- Despite this, the BRVM-listed lender (BRVM: BOAB) will propose a dividend of 468 FCFA ($0.77) per share, up 32.6% from 353 FCFA ($0.58) in 2023
Bank of Africa (BOA) Benin plans to draw from its reserves to maintain dividend payouts, despite reporting an 8.74% decline in 2024 net profit. The proposal will be voted on at the General Meeting on April 2 in Cotonou.
Net income fell from 21.53 billion FCFA ($35.49 million) in 2023 to 19.65 billion FCFA ($32.39 million) in 2024, impacted by regional pressures such as the devaluation of the Nigerian naira, border closures with Niger, and a 300 basis point rise in WAEMU refinancing costs. The bank had already reported a 12.82% drop in first-half profits.
Despite this, the BRVM-listed lender (BRVM: BOAB) will propose a dividend of 468 FCFA ($0.77) per share, up 32.6% from 353 FCFA ($0.58) in 2023. The total dividend budget will be 19.99 billion FCFA ($32.96 million), exceeding net income and requiring 349.4 million FCFA ($577,000) from reserves.
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Key Takeaways
BOA Benin’s decision to uphold its dividend policy reflects a shareholder retention strategy, even as market volatility and economic uncertainty weigh on earnings. The stock, currently priced at 4,030 FCFA ($6.64), remains attractive, gaining 9.36% year-to-date and 112.11% over five years. With a P/E ratio of 8.33, it trades slightly above the financial sector average, indicating investor confidence. However, the elevated beta of 1.33 signals higher sensitivity to market swings, which could affect investor sentiment. As peer institutions like BICC prepare to list, BOA Benin’s generous dividend strategy could support stock performance—but continued reserve use may raise concerns about long-term reinvestment capacity.
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