A report by Ernst and Young Global Limited (EY) suggests that Nigerian banks are gearing up for robust dividend payouts in the coming years by utilizing a significant portion of their retained earnings.
The recent recapitalization initiative by the Central Bank of Nigeria (CBN), coupled with the exclusion of retained earnings from minimum capital requirements, has prompted banks to seek approximately N4 trillion to sustain operations.
EY highlighted that dividend payouts would fortify shareholders’ financial positions, emphasizing adherence to the regulatory guidelines outlined by the CBN. It will also serve as a means for banks to distribute profits to shareholders, signaling financial robustness and attracting investors seeking regular income. Moreover, consistent dividend payments can enhance a bank’s reputation and foster greater shareholder loyalty, contributing to overall market confidence and stability.
Source: Business Day