Only 6 banks pay N1.27trn dividends despite huge profits
***t’s a conservative capital management strategy —CIS Boss
***CBN stopped the dividends —Adonri
By Peter Egwuatu
Only six of Nigeria’s biggest listed banks rewarded shareholders with a combined N1.27 trillion dividend for the 2025 financial year, while five other profitable lenders were barred from making payouts after failing to meet the Central Bank of Nigeria’s prudential requirements.
Financial Vanguard findings showed that GTCO, Zenith Bank, Stanbic IBTC, Ecobank Transnational Incorporated, Wema Bank and FCMB passed the apex bank’s dividend eligibility test and declared payouts.
However, five other banks, despite posting strong profits, withheld dividends as the CBN’s capital retention policy , rising non-performing loans and other prudential guidelines constrained their ability to reward share
CBN’s prudential guidelines and rising Non-Performing Loans, NPLs, in many banks were responsible for the non-payment of dividend by the banks for the financial year ended 2025.
Findings by Financial Vanguard showed that six banks paid dividends totaling N1.27 trillion to their shareholders, while five others did not pay, as they were unable to meet the dividend guideline set by the apex bank, even though they made profit.
The banks that paid dividend include Guaranty Trust Bank, GTCO (N429.830 billion at N12.76 per share), Zenith Bank (N410.698 billion at N10.00 per share), Stanbic IBTC (N63.607 billion at N4.00 per share), Ecobank Transnational Incorporated ($40m at 0.16 cent per share); and FCMB (14.969 billion at 35kobo per share).
The Tier-1 banks, which include GTCO and Zenith, accounted for the bulk of dividend payout, representing 81.9%
Profit decline
According to the audited financial statement ended December 31, 2025, the 11 big banks listed on the Exchange posted a combined Profit Before Tax (pretax) of N6.4 trillion against N6.7 trillion in the same period 2024, indicating a decline by 3.8%.
The Tier-1 banks recorded N4.15 trillion pretax in 2025 against N5.06 trillion recorded in 2024, while Tier-2 posted N2.262 trillion against N1.602 trillion in 2024.
Gross earnings
The banks recorded combined gross earnings of N26.4 trillion in 2025 against N23.2 trillion in 2024. The Tier-1 banks’ gross earnings rose broadly, with the total amount collectively rising to N18.2 trillion from N16.9 trillion in the same period of 2024, while Tier-2 recorded N9.5 trillion from N7.6 trillion.
The growth in gross earnings by the Tier-1 banks was led by Access Holdings recording N5.5 trillion in 2025 up from N4.9 trillion reported in 2024, while Zenith Bank followed with N4.1 trillion up from N3.8 trillion. GTCO saw its gross revenue rise slightly to N2.15 trillion in 2025 from N2.11 trillion in 2024.
First HoldCo recorded an increase to N3.4 trillion against N3.2 trillion, while UBA recorded a slight decline to N2.97 trillion from N3.1 trillion.
Analysts /Experts give insight
Speaking to Financial Vanguard on the reasons some banks were unable to pay dividends, even when they made strong profit, Fiona Ahimie, President, Chartered Institute Stockbrokers, CIS said: “The divergence in dividend payments among Nigerian banks this year was primarily driven by differences in capital strength, regulatory compliance, earnings quality and strategic priorities, rather than profitability alone.
”Some banks declared dividends because they maintained strong capital adequacy ratios, delivered robust earnings and were able to satisfy regulatory requirements while retaining sufficient capital to support future growth.
”Others, despite reporting profits, opted not to pay dividends because preserving capital became a higher priority.
”This was influenced by the banking sector’s recapitalisation, the need to strengthen balance sheets, higher risk asset provisioning and, in some cases, regulatory restrictions on dividend distribution where prudential requirements were not fully met.”
It is a conservative capital management strategy – CIS boss
Commenting on the implication of the non-payment of dividends to investors, she said: “The immediate implication is a divergence in returns. Income-focused investors who rely on dividend payments may shift their preference towards banks with stronger capital positions and consistent payout records.
”For banks that suspended dividends, there could be short-term pressure on their share prices as investors reassess valuation and income expectations.
”However, if retained earnings are deployed effectively to strengthen capital and support future earnings growth, the decision could ultimately create greater long-term shareholder value.”
On the implications to banks’ customers, Ahimie, said: “For customers, the impact is relatively limited in the near term. A bank’s decision not to pay dividends does not necessarily indicate financial distress.
”In many cases, it reflects a conservative capital management strategy designed to improve resilience and enhance the bank’s capacity to support lending, digital investments and business expansion.
”Stronger capital positions ultimately translate into greater confidence in the banking system.”
Looking ahead, Ahimie stated: “The outlook for the banking industry remains constructive.
”As most banks already met the recapitalisation and other regulatory requirements, dividend payments are expected to become more stable and predictable. So they are likely to maintain relatively consistent distributions due to their stronger earnings capacity and capital positions.”
CBN stopped the dividends – Adonri
Commenting, David Adonri, Highcap Securities Limited, said: “Several banks did not pay dividends for the financial year ended December 31, 2025, because after reviewing their financial accounts, CBN was not convinced that they were strong enough to pay dividends.
”That was a stringent move by CBN to safeguard the interest of depositors notwithstanding the expectation of investors.
“CBN stopped the banks affected from paying dividends because when the forbearance given banks in respect of partial provisioning for doubtful credits lapsed, the banks did not have sufficient retained profits after application of full provisioning.
”Some of the banks were faced with the need for funds to redeem their pending foreign debt obligations which would have been hampered if they dissipated their cash on dividends.
“With this kind of stern regulatory action by CBN, shareholders will be forced to scrutinise the management of their banks to forestall any future threat to their dividend income.
”Banking is a delicate business. It requires stringent monitoring from regulators and shareholders to prevent abuses and failure. The action of CBN in stopping payment of dividends by some banks should boost depositors’ and investors’ confidence in the industry.”
It was a regulatory push-back – Olayinka
Commenting as well, Tajudeen Olayinka, Investment banker and Chartered Stockkbroker, said: “The inability of some Nigerian banks to pay dividends from their 2025 accounts arose from deliberate regulatory pushback.
”Many of the affected banks had huge final write-off from regulatory forbearance which could impact their balance sheets if they were allowed to pay dividends.
”It was CBN that refused to approve payment of dividends by these banks, by invoking its regulatory power over the banks.”
While commenting on the future outlook for the industry, he said: “The industry has bright future. Most of the banks affected actually proposed to pay dividends, in spite of the need to end forbearance.
”So, it wasn’t that they didn’t have enough, CBN just felt it might appear excessively imprudent if the affected banks were allowed to pay dividends alongside huge provisions and write-off they were compelled to make.
”Some of the banks were also exposed to a huge syndicated loan default from Nestoil which they have now fully provided for. I must say that the current regulatory stance imposes discipline and prudence on Nigerian banks, which is positive for the industry and key stakeholders.
Why CBN stopped some banks – Kurfi
In his comments, Mallam Kasimu Kurfi, said: “The governor of the Central Bank of Nigeria has said that those banks that did not pay dividend were not able to clean their impairments and were denied to pay dividends”.
He also added that one of the tier-1 banks was stopped by CBN from paying dividend because of its exposure to its foreign bank subsidiary, which was about 20% of shareholders’ funds, over the 10% limit which the CBN set in the prudential guideline.
”The banks needs to either increase their shareholders’ funds or sell some of their holdings to align with the maximum limit of 10% shareholders’ funds before they can be allowed to pay dividends to shareholders,” he said.