Nigerian banks are set to pay out about N185.5 billion as interim dividends for the first half of 2024 (H1 2024). This marks a 107 percent year-on-year growth from the N89.5 billion distributed as interim dividends in H1 2023.
The figure for H1 2024 is projected to increase as Fidelity Bank has yet to make any announcements concerning its interim dividends for the period.
Nigerian banks have been on a roll since 2023, with the banks distributing up to N500 billion in total dividends for the 2023 financial year. This growth in dividend payments has coincided with the bumper profit enjoyed by the banks due to the rising interest rates.
With interim dividends for H1 2024 hitting record levels, it is projected that total dividends for the full year will hit record levels. Also, the increasing returns to shareholders are in line with analyst projections for the banking sector as these banks look to their shareholders to boost their capital bases ahead of the 2026 recapitalization deadline.
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The amount to be paid out for H1 2024 is to be paid out by six banks, Access Holdings, UBA, FBN Holdings, GTCO Holdings, Zenith Bank, and Stanbic IBTC Holdings. Wema Bank, FCMB Group, and Sterling Holdco will not pay out interim dividends for the half-year.
Despite recording the lowest net income among the top-tier banking groups, UBA will pay out the highest interim dividend of N68.4 billion. This represents a dividend payout ratio of 21.6 percent for the half-year. In H1 2023, UBA paid out an interim dividend of N17.1 billion, still the highest among the tier-1 banks.
In FY 2023, GTCO Holdings paid out the highest total dividends among Nigerian banks, with N97.1 billion. For that financial year, the bank recorded a dividend payout ratio of 18%. GTCO Holdings is set to pay out N29.4 billion in interim dividends for H1 2024, marking a 100 percent year-on-year growth from the N14.7 billion distributed for H1 2023.
Despite the record growth in interim dividend payout, GTCO Holdings recorded a dividend payout ratio of 3 percent for H1 2024, a significant decline from the 5 percent recorded in H1 2023. The group’s dividend payout ratio decline is linked to the staggering profit growth recorded during the half-year, of which a substantial part is attributed to unrealised gains.
Zenith Bank is also set to pay out a record interim dividend of N31.4 billion for H1 2024, marking a 100 percent year-on-year growth from the N15.7 billion paid out as an interim dividend for H1 2023.
Despite posting a net income of N116.4 billion net income for H1 2024, Stanbic IBTC is set to pay an interim dividend of N25.9 billion, marking a dividend payout ratio of 22.2%, the highest among the banks.
Access Holdings is set to distribute N16 billion in interim dividends for H1 2024, representing a 50 percent growth from the N10.7 billion distributed in the corresponding period in 2023. FBN Holdings is also set to distribute N14.4 billion in interim dividends for H1 2024, a significant improvement, considering the bank didn’t pay out any interim dividends for the first half of 2023.
The distributions by these banks have been touted as a strategy for rerouting capital from retained earnings to the shareholders, however, with the outstanding shares of these companies set to increase due to recapitalization efforts, the dilutive effect of these efforts may be reflected on the dividend per share.
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