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LAGOS, Sept 14 (Reuters) - Nigeria’s Stanbic IBTC Bank will offer shareholders the option to receive scrip dividends in lieu of cash dividends over the next three years, it said on Thursday, after it declared an interim dividend.
The mid-tier lender, which is part of South Africa’s Standard Bank, did not give a reason for the move.
The bank declared an interim dividend of 0.60 naira for its half-year to June 30. It set a reference price of 39.45 naira for the scrip issue, compared with Thursday’s share price of 40.02 naira.
“Shareholders have a choice of receiving dividends declared by the company, up to year 2020, either in cash or may elect to receive their dividends as new ordinary shares in the company,” the bank said.
Nigerian companies have been struggling in an economy battered by low oil prices. Companies typically use scrip dividends to conserve cash.
In March, Nigerian Breweries granted shareholders the option of taking new shares in lieu of a cash dividend, so that it can use the money to cut interest costs and fund working capital.
Nigeria’s IPO market has been moribund for close to a decade. The Securities and Exchange Commission has proposed cutting listing fees to attract issuers. Stanbic shares have gained 167 percent so far this year, outperforming the broader index, which is up 32 percent. (Reporting by Chijioke Ohuocha; editing by Jason Neely and Susan Thomas)