AIICO Insurance Considers 40% Dividend Payout

September 20, 2020
Babatunde Fajemirokun AIICO Insurance

By Dipo Olowookere

Managing Director/Chief Executive Officer of AIICO Insurance Plc, Mr Babatunde Fajemirokun, has said there are plans to increase the dividend payout to shareholders to 40 per cent.

At the moment, according to him, the payout is around 10 per cent of the profit made by the insurance company for a given financial year.

At a Fact Behind the Offer held last Friday in Lagos and monitored by Business Post, Mr Fajemirokun said this increase in the dividend payout is expected to happen in the coming years.

“We hope to increase the dividend payout to the company’s shareholders to 40 per cent of the profit made in the future, but we have to put some things in place to achieve this,” the AIICO CEO said.

However, he said pending the proposed increase in the dividend payout to 40 per cent in the near future, the board will like to maintain the current trend to make shareholders happy.

“We intend to keep the present level of the dividend payout at 10 per cent and improve on the level of return on investment,” Mr Fajemirokun informed participants of the event, which was organised by the Nigerian Stock Exchange (NSE) and took place via Zoom.

In the 2018 financial year, the board of AIICO Insurance recommended the payment of a final dividend of 6 kobo and for the 2019 accounting year, it proposed a bonus issue of one share for every five shares held by shareholders as at the close of business of June 25, 2020.

The company is currently having is a rights issue, where it plans to raise N3.5 billion to boost its capital base in compliance with the new regulations of the National Insurance Commission (NAICOM).

The firm is expected to increase its capital to N18 billion and the rights issue should take it to about N15.

Business Post gathered from the CEO that AIICO Insurance’s capital base was initially at N6.3 billion, but this was raised to N11.6 billion after attracting two new investors through private placements.

The shortfall from the rights issue is expected to be raised from the bonus share issue, but if the company is unable to meet the N18 billion target, funds would be drawn from the retained earnings, according to Mr Fajemirokun.

AIICO Insurance, in the rights issue, is offering a total of 4,357,770,954 ordinary shares of 50 kobo each at 80 kobo per unit on the basis of five new ordinary shares for every 13 ordinary shares held as at the close of business on Monday, June 15, 2020.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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