Renowned financial literacy coach and chartered accountant Memory B. Simwaba has released an insightful breakdown of Standard Chartered Bank Zambia’s proposed bonus share issuance, offering shareholders and the public a clear understanding of what the move means ahead of the bank’s Extraordinary General Meeting (EGM) set for 17 December 2025.
Standard Chartered Bank Zambia has proposed issuing bonus shares at a ratio of 1 for every 4 shares held, meaning shareholders will automatically receive additional shares at no cost. Simwaba explains that this corporate action is typically regarded as shareholder-friendly, but it also comes with important considerations.
What the Bonus Issue Means for Shareholders
1. Increased Shareholding
Shareholders will receive one extra share for every four shares they currently own. For instance, anyone holding 10,000 shares will receive 2,500 additional shares. This increases each shareholder’s total share count without requiring new capital.
2. Possible Dilution of Share Price
While shareholders gain more shares, the market value of the company does not immediately increase. Simwaba notes that this can lead to a lower share price after the bonus issue, as each share represents a slightly smaller portion of the company. However, shareholders’ overall ownership percentage remains unchanged.
3. Market Confidence Indicator
Simwaba adds that issuing bonus shares often signals strong financial health. It suggests that the bank has sufficient retained earnings and confidence in its long-term performance.
4. Potential for Future Market Growth
By increasing liquidity in the market, bonus shares can attract new investors and boost trading activity. This may contribute to a higher valuation over time, depending on market conditions.
Awaiting the EGM Decision
The proposal will be tabled before shareholders at the EGM on 17 December 2025, where it will require approval before implementation. Simwaba encourages investors to monitor the meeting closely and conduct their own research and analysis before making any decisions.
A Move Seen as Largely Positive
Overall, Memory B. Simwaba views the proposal as generally favourable for shareholders, rewarding them with additional equity while reflecting the bank’s strong financial position. However, she also notes that some analysts have raised compliance-related questions surrounding the move — another reason she urges shareholders to stay informed.
As anticipation builds toward the EGM, the discussion around Standard Chartered Bank Zambia’s bonus share plan continues to grow, with financial experts like Simwaba helping the public navigate the implications with clarity and confidence.
