DIVIDEND POLICY

This study investigates the determinants of dividend payout in the Nigeria Banking Sector in Nigeria for the period 2015 to 2019. The rationale for the study was based on the realization that rapid economic growth, among others, depends on the robust activities of the banking sector of the economy. Thus, the ordinary least squared econometric technique (OLS) was employed in the analysis of the data; and the empirical findings showed that A positive correlation exists between the ROE, ROA and EPS as performance measures. Thus, an increase in one of them invariably and simultaneously leads to the achievement of the other performance measure; current dividend payout and past dividend payout have a positive and significant influence in the determination of ROE and ROA. In the case of EPS, current dividend payout has a positive and significant influence while that of past dividend is weak; growth opportunity has a positive and significant influence in the performance of firms reflected in the three measures of ROE, ROA and EPS, with the influence on ROE and EPS overwhelming; leverage (ratio of total debt to total capital of firm) has a negative and significant impact on firm performance using ROA, while its influence on ROE and EPS is positive but insignificant; firm’s size has a positive and significant impact in the determination of ROE, while the influence it has on ROA and EPS is negative and significant, and increased cash flow for firm tends to stimulate higher performance as the relationship between cash flow and firm performance is positive (though insignificant). The study recommends that financial managers should institute sound, coherent and efficient dividend policies such that will enable them determine the right dividend policy that will enhance firms’ performance in Nigeria, and appropriate firm disclosure with respect to dividend payout and dividend per share is needed to guard the investing public in making the right investment choices in listed firms.

This study examines the relationship between dividend policy and the financial performance of deposit money banks in Nigeria. Dividend policy remains a critical financial decision that influences investors’ confidence and the overall valuation of firms, particularly in the banking sector. The study adopts an ex-post facto research design and utilizes secondary data obtained from the annual reports and financial statements of selected deposit money banks listed on the Nigerian Exchange Group over a specified period.Key variables considered include dividend payout ratio, dividend yield, and retention ratio as proxies for dividend policy, while financial performance is measured using indicators such as return on assets (ROA), return on equity (ROE), and earnings per share (EPS). The data are analyzed using descriptive statistics, correlation analysis, and multiple regression techniques to determine the nature and strength of the relationship between dividend policy and bank performance. The findings reveal that dividend payout has a significant positive effect on the financial performance of deposit money banks, suggesting that consistent dividend payments enhance investor confidence and market value. However, retention ratio shows a mixed effect, indicating the need for banks to strike a balance between profit distribution and reinvestment for growth. The study concludes that an optimal dividend policy is essential for improving the financial performance and sustainability of deposit money banks in Nigeria. It recommends that bank management should adopt a stable and well-structured dividend policy that aligns with profitability, liquidity position, and long-term growth objectives