The Central Bank of Nigeria (CBN) circular on dividend payout by commercial banks and discount houses has been analysed based on the performances and balance sheet positions of all lenders.
A report released yesterday by Afrinvest West Africa, an investment and research firm, showed that only six banks – Access Bank, First City Monument Bank (FCMB), Guaranty Trust Bank, United Bank for Africa, Wema Bank and Zenith Bank- met the CBN’s minimum requirement for Capital Adequacy Ration (CAR) and Non-Performing Loans.
Hence these banks are excluded from the restrictions on dividend payment.
The firm explained that many lenders will not be able to pay dividends based on their capital reserves as well as the proportion of Non-Performing Loans (NPLs) in a bid to forestall any threats to customer deposits in the system.
On the policy that no bank or discount house shall be allowed to pay dividend out of reserves, the analysis shows that no Nigerian bank breached this provision.
