What Accounts for Dividend Payment in Nigerian Banks
NYOR, Terzungwe; ADEJUWON Adeyinka Adekunle

Investors expect return on investment which is in the form of capital gains and or dividend. Dividend policy in the Nigerian Banking Industry differs as each bank decides on what, how and when to pay dividend to its shareholders. Whatever dividend policy model that is adopted, there are factors that determine the payment of such dividend. The objective of the study is to ascertain what accounts for dividend payout in the Nigerian banking industry taking profit after tax, shareholders fund and liquidity as determinants of dividend payout. The study covers a period of ten years from 2001 to 2010. Data was obtained from the financial Statements of five sampled banks quoted on the Nigerian Stock exchange as at December 2010. Using multiple regressions, the study finds that Profit after tax (PAT), Shareholder funds (SHF) and Liquidity (LIQ) all accounts for dividend payout in Nigerian banks, but liquidity is the foremost of them all. Hence, the study recommends a robust liquidity position that will guarantee investors’ confidence and keep shareholder funds stable as profit from daily business takings will culminate into good dividend payout.

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