By Niyi Jacobs
The Nigerian banking industry has consistently demonstrated its profitability, with nine prominent banks quoted on the Nigerian Exchange (NGX) declaring a staggering N1.75 trillion in dividends to shareholders over the last five years. A recent analysis by Nairalytics has ranked these banks based on their gross dividend payout and dividend payout ratio between 2019 and 2023.
RANKING THE BANKS
The top 7 banks with the highest dividend payouts are:
- Zenith Bank: N244.8 billion
- Guaranty Trust Holding Company (GTCO): N234.8 billion
- Stanbic IBTC Holdings: N143.8 billion
- United Bank for Africa (UBA): N134.8 billion
- Access Holdings: N129.8 billion
- First Bank of Nigeria Holdings: N94.8 billion
- Fidelity Bank: N61.4 billion
DIVIDEND PAYOUT RATIO
The dividend payout ratio, a critical indicator of how much a company returns to its shareholders in the form of dividends relative to its net income, averaged 26% across the banks. This indicates that, on average, 74.5% of the net profit was reinvested into the business and recorded as retained earnings.
FIDELITY BANK’S IMPRESSIVE GROWTH
Fidelity Bank, ranked 7th, has shown remarkable improvement in its dividend payouts over the last two years, with dividend per share rising to N0.5 and N0.8 per share in 2022 and 2023, respectively. This represents an astonishing compounded annual growth rate of 44%, the best in the sector.
INDUSTRY INSIGHTS
The Nigerian banking industry’s profitability and consistent dividend payouts make it an attractive sector for investors seeking steady returns. The ranking provides valuable insights into how much banks return to shareholders versus retained earnings, helping investors assess potential investments.
