Only six banks pay N1.27trn dividends as CBN blocks five others

Only six of Nigeria’s major listed banks paid dividends totalling N1.27 trillion for the 2025 financial year, while five profitable lenders were unable to reward shareholders after failing to meet the Central Bank of Nigeria’s prudential requirements.

Findings show that Guaranty Trust Holding Company (GTCO), Zenith Bank, Stanbic IBTC, Ecobank Transnational Incorporated, Wema Bank and FCMB were among the banks that secured approval to pay dividends.

GTCO accounted for the largest payout at N429.83 billion, representing N12.76 per share, followed by Zenith Bank with N410.70 billion at N10 per share. Stanbic IBTC paid N63.61 billion at N4 per share, while Ecobank Transnational Incorporated paid $40 million. FCMB paid N14.97 billion at 35 kobo per share.

The two Tier-1 lenders, GTCO and Zenith Bank, accounted for about 81.9 per cent of the total dividend payout.

The five banks that did not pay dividends despite recording profits were affected by the CBN’s prudential guidelines, including capital retention requirements, loan-loss provisions and rising non-performing loans.

The development came as the 11 major banks listed on the Nigerian Exchange reported combined profit before tax of N6.4 trillion in 2025, down from N6.7 trillion recorded in 2024, representing a 3.8 per cent decline.

However, their combined gross earnings increased to N26.4 trillion in 2025 from N23.2 trillion a year earlier.

Tier-1 banks recorded combined gross earnings of N18.2 trillion, up from N16.9 trillion, while Tier-2 banks increased their earnings to N9.5 trillion from N7.6 trillion.

Experts said the inability of some banks to pay dividends was driven more by regulatory requirements and capital preservation than by profitability.

The President of the Chartered Institute of Stockbrokers, Fiona Ahimie, said banks that paid dividends generally had stronger capital positions and were able to meet regulatory requirements while retaining sufficient funds to support future growth.

She said banks that suspended dividends prioritised balance-sheet strengthening, higher provisions and recapitalisation requirements.

According to her, the decision could put short-term pressure on the share prices of affected banks as income-focused investors reassess their positions, but retained earnings could ultimately strengthen the banks and create long-term value if deployed effectively.

Investment banker and chartered stockbroker Tajudeen Olayinka said the CBN’s decision represented a regulatory pushback against banks whose balance sheets were affected by the expiration of regulatory forbearance.

He said some banks had proposed dividends but were stopped by the regulator because allowing them to distribute profits alongside significant provisions and write-offs could have weakened their financial positions.

David Adonri of Highcap Securities Limited said the CBN’s decision was aimed at protecting depositors, noting that some banks lacked sufficient retained profits after making full provisions for doubtful credits.

He added that some lenders also needed funds to meet foreign debt obligations, making dividend payments potentially imprudent.

Financial analyst Kasimu Kurfi said some banks were denied dividend approval because they had not sufficiently addressed impairment issues.

He also cited a case involving a Tier-1 bank whose exposure to a foreign subsidiary exceeded the CBN’s prescribed limit relative to shareholders’ funds.

Kurfi said affected banks would need to strengthen their capital or reduce their holdings to comply with the regulator’s requirements before dividend payments could resume.

The experts, however, maintained that the banking sector’s medium-term outlook remained positive, particularly as lenders continue to strengthen their capital bases and comply with the recapitalisation requirements.