Six commercial banks have so far met the Central Bank of Nigeria’s directive on dividend payout by commercial banks and discount houses.
A circular of the CBN on dividend payout by commercial banks and discount houses has been analysed, based on the performances and balance sheet positions of all lenders.
The banks are Access Bank, Zenith Bank, Guaranty Trust Bank, First City Monument Bank, Wema Bank and United Bank for Africa.
According to a report, which was released by Afrinvest West Africa, an investment and research firm, only six banks have met the apex bank’s minimum requirement for Capital Adequacy Ratio and Non-Performing Loans, and they are excluded from the restrictions on dividend payment.
On the criteria that require lenders to meet the minimum Capital Adequacy Ratio before dividend payout, the research firm said all the banks under its coverage, save for Unity Bank and Union Bank, met the minimum requirement stipulated by the CBN.
“For Unity Bank, the current CAR (as at nine month 2017) is unavailable while Union Bank had a CAR of 13.3 per cent (below CBN requirement of 15 per cent in first half of 2017). We envisage Union Bank’s CAR will improve by fiscal year 2017, adjusting for the capital raise of N50 billion via rights issue in 2017,” it said.
Diamond Bank, Fidelity Bank, Stanbic IBTC, Sterling and Union Bank are restricted to a maximum of 30 per cent maximum payout ratio, with respective NPL ratio above five per cent but below 10 per cent.
Banks that may not pay dividends to shareholders, going by the new rule, include Skye Bank and Unity Bank. In addition, banks that are not expected to pay dividend due to their negative retained earnings/accumulated deficit positions are Union Bank (N244 billion), Unity Bank (N276 billion) and (Wema Bank N38 billion).
