Dividends

Zenith Bank Leads Nigerian Banks with Impressive Dividend Payout Despite Economic Challenges

Published

1 year ago

April 10, 2023

Despite the global economic upheaval and domestic challenges faced by the Nigerian banking sector, six out of 13 listed banks on the Nigerian Exchange Limited (NGX) declared a total of N389.8 billion in dividends to shareholders between the 2021 and 2022 financial years.

This impressive feat was on the back of N1.32 trillion profit after tax, N691.97 billion in 2022, and N631.41 billion in 2021.

The year 2021 and 2022 were marked by significant headwinds across all emerging markets, including Russia-Ukraine conflict, inflationary pressures, lockdowns related to COVID-19 outbreaks, and supply chain bottlenecks.

Despite these challenges, Zenith Bank Plc, United Bank for Africa Plc (UBA), Stanbic IBTC Holdings Plc, Ecobank Transnational Incorporated (ETI), FCMB Group Plc, and Jaiz Bank Plc stood out by declaring N198.2 billion and N191.6 billion dividends in 2021 and 2022, respectively.

Zenith Bank, with a total profit of N468.47 billion between 2021 and 2022, proposed a dividend of N197 billion, while UBA declared N227.84 billion profit in the same period and proposed a dividend of N71.82 billion.

Despite a decrease in Zenith Bank’s group profit after tax from N244.6 billion to N223.9 billion due to the effective implementation of the Finance Act, the bank remains at the forefront of dividend pay-out to shareholders.

“This increase is because of the effective implementation of the Finance Act. This significant increase is a one-off and is not expected to recur in subsequent years. This affected return on equity which reduced from 20.4 per cent to 16.8 per cent,” the bank explained in its financial statement seen by Investors King.

Although Access Corporation, Guaranty Trust Holding Plc, Sterling Financial Holdings Company Plc, Union Bank Plc, Wema Bank Plc, Fidelity Bank Plc, and FBN Holdings are yet to declare their financial statement or dividend for 2022, market analysts have commended the resilience of Nigerian banks.

Capital market analysts praised the corporate earnings and dividend payout of Zenith Bank Plc and other financial institutions, stating that the Nigerian banking sector is resilient in overcoming both domestic and foreign challenges.

Shareholders have also expressed their satisfaction with the dividend payout, emphasizing the consistency of some companies in dividend payout despite the economic hardship.

Chairman Progressive Shareholders Association (PSAN), Boniface Okezie, stated that Nigerian banks’ performance shows resilience in the corporate world and gives hope for the domestic economy.

Dividend-paying stocks are a good source of stable income streams for investors. Therefore, many investors prefer companies with a history of growing dividend payout, such as Zenith Bank, UBA, and Stanbic IBTC Holdings.

Although the NGX Bank index did not respond to dividend payout in the financial sector in Q1 2023, it is expected that these banking stocks will bounce back in the second quarter of 2023 once unaudited first-quarter results and accounts are released to the investing public.

Nigerian banks have displayed resilience in overcoming economic challenges and remain a reliable source of investment for shareholders.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Dividends

Zenith Bank to Pay N109.88bn Dividends to Shareholders for 2023

Published

2 weeks ago

April 9, 2024

Samed Olukoya

Zenith Bank, one of Nigeria’s leading financial institutions, is set to distribute dividends totaling N109.88 billion to its shareholders for the 2023 financial year.

The announcement was made as part of the bank’s annual report filed with the Nigerian Exchange Limited on Monday.

The dividends amount to N4.00 per share. This includes a final dividend of N3.50 per share and an interim dividend of N0.50 per share paid earlier in the year.

The proposed dividends are subject to approval by shareholders at the next Annual General Meeting (AGM) and are payable from the retained earnings accounts as of December 31, 2023.

Throughout the fiscal year, Zenith Bank’s gross earnings surged by 125.50 percent to N2.13 trillion compared to N945 billion in the previous year.

The increase in gross earnings contributed to the bank’s impressive profit after tax, which increased to N676.91 billion, an increase from N223.91 billion recorded in 2022.

This positive performance was driven by the increase in interest and similar income, which rose to N1.14 trillion from N540 billion.

However, the bank experienced a decline in net income on fees and commission, dropping to N109.31 billion from N132.79 billion in 2022, indicating a 17.68 percent decrease.

This decline was attributed to an increase in fees and commission expenses, which grew to N68.21 billion from N24.42 billion in the previous year.

Also, Zenith Bank disclosed various operational expenses incurred during the year, including insurance premiums paid to Zenith General Insurance Limited and Prudential Zenith, as well as payments for information technology services rendered by Cyberspace Network.

Dividends

SEC Steps Up Efforts to Reduce Unclaimed Dividends in Capital Market

Published

1 month ago

March 8, 2024

Samed Olukoya

The Securities and Exchange Commission (SEC) has intensified its efforts through a series of strategic initiatives and investor clinics across various regions.

The latest endeavor took place in Yobe State, where the SEC, in collaboration with the Gombe State Investment and Property Development Company, organized a three-day investors clinic.

Mr. Danladi Mohammed, the Head of the SEC Zonal Office in Kano, disclosed that the initiative aimed to address concerns related to unclaimed dividends and enlighten investors on crucial matters such as e-dividend and dematerialization of shares certificates.

The clinic also served as a platform to handle inquiries and complaints from shareholders in Yobe State and its environs.

Unclaimed dividends in the Nigerian capital market reached a staggering N190 billion by August 2023, prompting regulatory authorities to take decisive action.

The SEC views reducing unclaimed dividends as a key objective outlined in the Capital Market Development Master Plan 2015 to 2025.

The initiative aligns with the SEC’s commitment to fostering investor confidence and ensuring market integrity.

It reflects the Commission’s dedication to fulfilling its mandate of regulating and developing the Nigerian capital market to meet international standards.

The SEC’s Director-General, Lamido Yuguda, emphasized the importance of investor education and engagement in addressing the challenge of unclaimed dividends.

Through investor clinics and proactive measures, the SEC aims to empower investors to claim what rightfully belongs to them and enhance transparency and efficiency in the capital market ecosystem.

Dividends

Nigerian Exchange Group Shareholders to Receive N1.5bn Dividends Amid Profit Surge

Published

2 months ago

March 5, 2024

Samed Olukoya

The Nigerian Exchange Group (NGX) has announced a N1.5 billion dividend for its shareholders following a remarkable profit surge.

In the statement released by NGX’s Head of Marketing & Corporate Communications, Clifford Akpolo, the company recorded a robust profit after tax of N5.2 billion for the financial year ending December 2023.

The company’s audited financial statements disclosed a 57.4% increase in gross earnings to N11.8 billion, attributed to strong performances in core revenue streams and other income segments.

Transaction fees surged by 52.6%, driven by heightened trading activities, while listing fees and rental income rose by 42.2% and 41.8%, respectively.

Strategic investments also contributed significantly to a 5.4% boost in treasury investment income. Other income, representing 29.7% of gross earnings, witnessed a remarkable surge of 163.6% to N3.504 billion.

The NGX board proposed a final dividend of N1.5 billion, translating to 75 Kobo per share, in addition to an interim dividend of N495.53 million at 25 Kobo per share paid earlier in August 2023.

Dr. Umaru Kwairanga, Chairman of NGX Group, affirmed the company’s commitment to maximizing shareholder value, while CEO Temi Popoola expressed satisfaction with NGX’s operational performance and emphasized the company’s trajectory of growth and innovation in the upcoming fiscal year.