(Ecofin Agency) - Société Générale Côte d'Ivoire once again stands out on the Abidjan Regional Stock Exchange for its generous dividend policy. For FY2023, the bank has announced that 55% of its net profit will be distributed in the form of dividends, achieving the highest payout ratio since 2017 and marking the sixth consecutive year of increases.

Among the 11 BRVM-listed companies, which have already made net dividend proposals, the leading bank in Côte d'Ivoire and the WAEMU boasts the second-largest increase at 39.1% compared to 2022, coming behind Coris Bank International, which saw a 50% hike. No official explanation has been provided for this dividend policy decision. However, it is speculated that the lower payout ratios recorded in 2018 and 2019 (16.7% and 18.6%, respectively), attributed to the unpredictability of the impact of the COVID-19 pandemic, have led the bank to adopt a more cautious strategy in those years.

During this time, Société Générale CI also embarked on a new customer acquisition strategy with its mobile banking product, Yup. Although Yup did not persist, it helped the bank attract new clients. Moreover, the bank launched private banking services and had to navigate international banking regulatory changes requiring compliance adjustments.

Despite these challenges, SGB CI seems to have restored some investor confidence, and its growth potential remains substantial. Since 2019, the bank's stock has seen an average annual increase of 19.1%, while its net profits have grown by about 27.12% over the same period. Even though its stock price has reached CFA17,000, the bank's growth potential is still evident, with a current price-to-earnings ratio of 5.4x, compared to the BRVM-listed banking sector's average of just over 6x.

Let’s note that this renewed generosity in dividend distribution primarily benefits the French banking group Société Générale, which directly and indirectly holds a 73.25% stake in the Ivorian bank. Other investors include Russell Investment, owning 0.5% of the capital, though it is unclear if this investment is on behalf of the Société Générale Group through its Darwin vehicle, or for the insurer Old Mutual, via its African frontier stock markets fund.