Nigerian banks have shown strength in the payment of dividends as they move to shore up their investment base by sustaining shareholder profits.
Banks’ major aim of paying out dividends is to ensure their shareholders get the needed profits. When dividends are paid and as at when due, it is a sign of good financial health for the banks and can also attract more investors seeking regular income as well as increase shareholder loyalty.
According to a recent report by Ernst and Young Global Limited (EY), a leading tax and advisory services, there will be an aggressive dividend payout by Nigerian banks in the coming years.
The report noted that the banks’ drive to increase and sustain profit making via dividend payouts was to strengthen the financial position of shareholders ahead of the recapitalisation exercise of the Central Bank of Nigeria (CBN).
Top 5 Nigerian banks that declared the most dividends
This ranking carried out by Analysts at Nairametrics presents the top five Nigerian banks that have paid the most dividends of at least ₦50 billion from 2019 to 2024:
1. Zenith Bank
Zenith Bank topped the list by disbursing a total of ₦505.48 billion from its profit of ₦1.6 trillion during the period in review.
2. Guaranty Trust Holding Company (GTCO)
GTCO came in second place on the list with ₦443 billion dividend payout in the last five years.
3. United Bank for Africa (UBA)
United Bank for Africa (UBA) ranks in third place having disbursed the sum of ₦219.56 billion in five years from a total profit after tax of ₦1.1 trillion gained during the period.
When analysed on a compound basis, the dividend per share growth rose by about 29%.
4. Access Holdings
Nigeria’s largest bank by total assets, Access Holdings reported a profit after tax of about ₦1.12 trillion in the last five years.
During the period in review, the bank declared an estimated ₦215 billion in dividends.
According to Nairametrics, the bank’s dividend per share which by estimates, rose to 35% on a compounded annual growth basis is the highest recorded amongst the major banks.
5. Stanbic IBTC
Stanbic IBTC came in fifth position in total dividend payments during the review period with an estimated ₦212.1 billion in dividends.
Analysts at Nairametrics also revealed Stanbic IBTC had the highest dividend payout ratio which was recorded as 48.6%, indicating a healthy profit return for shareholders.
The report however, noted that the total analysis is based on dividends declared which was obtained by the dividend per share of the banks multiplied by the average outstanding shares in the year the dividend was paid.
It also added that the profits used in the analysis included all the profits made by the bank, including that of its minority shareholders.