Only 6 Banks Pay N1.27trn Dividends As CBN Blocks 5 Others Over Capital, Provisioning Rules

Only six of Nigeria’s 11 major listed banks paid dividends totalling about N1.27 trillion to shareholders for the 2025 financial year, after the Central Bank of Nigeria, CBN, barred five other profitable lenders from making distributions over failure to meet prudential requirements.

The banks that paid dividends were Guaranty Trust Holding Company, GTCO; Zenith Bank; Stanbic IBTC Holdings; Ecobank Transnational Incorporated, ETI; Wema Bank; and FCMB Group.

A review of the banks’ audited financial statements by _Financial Vanguard_ showed that payouts were heavily concentrated among Tier-1 lenders. GTCO and Zenith Bank alone accounted for about 81.9 per cent of the total distribution.

GTCO paid approximately N429.83 billion, representing N12.76 per share, while Zenith Bank distributed N410.70 billion at N10 per share.

Stanbic IBTC paid N63.61 billion, equivalent to N4 per share. ETI declared a $40 million dividend, while FCMB paid about N14.97 billion, representing 35 kobo per share. Wema Bank was also among the dividend-paying lenders.

The five other listed banks, despite recording profits during the year, did not distribute dividends. Analysts attributed this to regulatory restrictions, capital requirements, loan-loss provisions, and the need to strengthen balance sheets.

*Combined Profit Declines To N6.4trn*

The 11 major banks listed on the Nigerian Exchange reported a combined Profit Before Tax, PBT, of approximately N6.4 trillion in 2025, compared with N6.7 trillion in 2024. This represents a decline of about 3.8 per cent.

Tier-1 banks accounted for N4.15 trillion of the 2025 figure, down from N5.06 trillion in 2024.

However, Tier-2 banks recorded significant improvement, with combined PBT rising to N2.26 trillion from N1.60 trillion in the previous year.

Despite the decline in aggregate profit, the banks recorded substantial growth in gross earnings.

Combined gross earnings rose to N26.4 trillion in 2025 from N23.2 trillion in 2024.

Gross earnings for Tier-1 banks increased to N18.2 trillion from N16.9 trillion, while Tier-2 banks recorded N9.5 trillion, compared with N7.6 trillion in 2024.

Access Holdings led the Tier-1 group with N5.5 trillion in 2025, up from N4.9 trillion in 2024.

Zenith Bank followed with N4.1 trillion, compared with N3.8 trillion a year earlier. GTCO’s gross earnings increased slightly from N2.11 trillion to N2.15 trillion.

First HoldCo also rose to N3.4 trillion from N3.2 trillion.

UBA recorded a marginal decline to N2.97 trillion from N3.1 trillion.

*’Dividend Gap Reflects Capital Strength’ — CIS*

President of the Chartered Institute of Stockbrokers, CIS, Fiona Ahimie, said the difference between banks that paid dividends and those that did not was not necessarily a reflection of profitability.

According to her, dividend decisions were influenced by capital strength, regulatory compliance, earnings quality, and strategic priorities.

“Banks that paid dividends generally had sufficient capital buffers, strong earnings and the ability to meet regulatory requirements while retaining enough funds to support future expansion,” she said.

For banks that withheld dividends, Ahimie said preserving capital had become a priority due to the sector’s recapitalisation programme, increased provisioning for risk assets, and regulatory restrictions.

She noted that income-focused investors could shift to banks with stronger capital positions and a history of consistent payouts. She added that dividend suspension could put short-term pressure on share prices, but retaining profits could ultimately benefit shareholders if deployed effectively.

On customers, she said the absence of dividends should not be interpreted as financial weakness, noting that retained earnings could help banks expand lending, invest in digital infrastructure, and strengthen resilience.

*’CBN Blocked Dividends To Protect Depositors’ — Adonri*

Investment analyst and Managing Director of Highcap Securities, David Adonri, said the CBN prevented some banks from paying dividends after reviewing their accounts and finding their financial strength inadequate.

He described it as a stringent measure designed to protect depositors.

Adonri explained that the expiration of regulatory forbearance on doubtful loans forced some lenders to make full provisions, leaving insufficient retained profits for dividends. He added that some banks also needed to preserve funds for foreign debt obligations.

“The CBN’s decision should encourage shareholders to pay closer attention to the financial condition and management practices of their banks,” he said.

*’Regulatory Push-Back To Enforce Prudence’ — Olayinka*

Investment banker Tajudeen Olayinka described the restrictions as a regulatory push-back aimed at enforcing prudence.

He said some affected lenders had significant write-offs following the expiration of forbearance, which could have weakened balance sheets if dividends were paid.

Olayinka noted that some banks had initially proposed dividends despite outstanding provisioning requirements. He said the issue was not necessarily a lack of profit, but the CBN’s concern that paying dividends alongside substantial provisions would be imprudent.

He also cited exposure to the Nestoil syndicated loan default, saying affected institutions had now made full provisions.

*’Impairments, Subsidiary Exposure Stopped Some Banks’ — Kurfi*

Financial analyst Mallam Kasimu Kurfi attributed the restrictions to banks’ inability to adequately clean up loan impairments.

He said the CBN governor had indicated that banks that failed to resolve impairment issues were not permitted to pay dividends.

Kurfi disclosed that one Tier-1 bank was restricted due to exposure to a foreign banking subsidiary of about 20 per cent of shareholders’ funds, exceeding the 10 per cent limit under CBN prudential guidelines.

The bank, he said, would need to increase shareholders’ funds or reduce holdings in the subsidiary before resuming dividend payments.

The developments underline the growing importance of capital adequacy, loan-loss provisioning, and regulatory compliance in determining how much Nigerian banks can distribute to shareholders, regardless of reported profits.