• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Business News Politics

CBN Dividend Policy: Are These The 4 Banks To Have In Your Portfolio?

Nairametrics by Nairametrics
October 26, 2014
in Politics
Share on FacebookShare on TwitterShare on Linkedin

Last week we reported that the CBN had issued a new directive that could restrict the quantum of dividends that can be paid by deposit money banks in Nigeria.

The new rules basically caps dividend payment for banks that don’t meet CAR requirements to just 30% of profits. As such,  investors in Nigerian banks now have to be mindful of the type of banks they invest in.

A new research from Renaissance Capital suggest Zenith Bank, GTB, STANBIC IBTC and Access Bank are probably the only banks that can meet that criteria. According to the report
,Rencap said,

RelatedStories

CBN issues directive to curb mass sacking by banks

How companies determine who to fire in an economic crunch

November 29, 2022
shopping mall prices

Why A Drop In Inflation Does Not Necessarily Mean A Drop In Prices Of Commodities

July 17, 2019

We think outside GTBank, Zenith, Access and Stanbic, the risk that a number of other banks’ CRR rating affects their dividend payout ratio is high. We understand the best rating CBN assigns is Moderate for most banks and from our checks with management; we believe GTBank has a Moderate rating. If this is the case, we imply that a number of other banks are likely to be on Above Average or High. Having a CRR of Above Average implies that the bank’s payout ratio is capped at 30 per cent, while a CRR of High implies no dividend payment. In addition, we think some banks’ payout will also have to be reduced to comply with the re-enforcement of the rules around the setting aside of statutory reserves as stated in the circular.

The report also suggest even the banks that seem unaffected for sake of prudence may also cut back on dividend payouts and to compensate for that may rely on bonus issues to compensate shareholders.

We do not think GTBank, Zenith, Access and Stanbic get affected much by these directives but given the current nature of the Nigerian banking environment, we expect them to consider lowering payout ratios from FY14E. While their capital ratios are sufficient, we think it will be a prudent decision for some to lower the payout to conserve some capital given tightening capital regulations and to support future growth, as opposed to a reactionary tier 1 capital raise in the near future. Other banks in a less favorable capital position are likely to have deeper dividend cuts, particularly those affected by the grey areas of this circular. To compensate, we have heard some banks mention the possibility of scrip dividends.”

The report also goes on to name the following banks as those that are close to the minimum CAR, which essentially is not a good thing.

As at 1H14, all the banks under our coverage (except Diamond, though this should normalise post-rights) met the minimum CAR requirement and had NPL ratios below five per cent. The banks which are too close to the minimum CAR requirement are FBNH, UBA (rights issue announced), FCMB (local currency tier 2 ongoing) and Stanbic (local currency tier 2 ongoing). The third criterion is however where the risk lies and is the grey area we cannot see through.

A portion of this article was culled from Thisday

Tags: News Review
Nairametrics

Nairametrics

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

Related Posts

CBN issues directive to curb mass sacking by banks
Small Business

How companies determine who to fire in an economic crunch

November 29, 2022
shopping mall prices
Blurb

Why A Drop In Inflation Does Not Necessarily Mean A Drop In Prices Of Commodities

July 17, 2019
Treasury Bills
Financial Literacy

20 Financial Terms You Need To Know In The Stock Market

August 5, 2018
MTN Nigeria Plc
Business News

30% equity of MTN’s shares could go to retail investors

June 13, 2018
[The Nigerian Economy Daily] FG has approved the closure of five foreign missions and embassies
Macros

THIS WEEK: Big Macros and a very important task for President Buhari.

June 10, 2018
internet subscriptions growth
Business News

Why Glo and 9mobile are losing their internet mobile subscribers

June 5, 2018
Next Post

2014 9 Months Results: Trans-Nationwide Express Post 46% Drop In PAT

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank
Zenth Bank








DUNS

Recent News

  • Top 10 Nigerian banks with the highest app downloads as of May 2025  
  • National Credit Guarantee Company Limited: Powering inclusive growth through risk-sharing guarantees 
  • Nigeria’s Pension industry maintains upward trajectory as assets reach N23.32 trillion – March 2025 

Follow us on social media:

Recent News

Nigerian banks, fintechs set to launch cNGN stablecoin on February 27 

Top 10 Nigerian banks with the highest app downloads as of May 2025  

June 13, 2025
National Credit Guarantee Company Limited: Powering inclusive growth through risk-sharing guarantees 

National Credit Guarantee Company Limited: Powering inclusive growth through risk-sharing guarantees 

June 13, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics