Only six of Nigeria’s major listed banks paid dividends totalling about N1.27 trillion to shareholders for the 2025 financial year, while five other profitable lenders were unable to make distributions after failing to satisfy the Central Bank of Nigeria’s (CBN) prudential requirements.
The banks that paid dividends were Guaranty Trust Holding Company (GTCO), Zenith Bank, Stanbic IBTC Holdings, Ecobank Transnational Incorporated, Wema Bank and FCMB.
Financial Vanguard’s review of the banks’ audited financial statements showed that the dividend payments were largely concentrated among the major Tier-1 lenders, with GTCO and Zenith Bank alone accounting 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. Ecobank Transnational Incorporated declared a $40 million dividend, while FCMB paid about N14.97 billion, representing 35 kobo per share.
The five other listed banks, despite recording profits during the year, did not distribute dividends. Analysts attributed the development to regulatory restrictions, capital requirements, loan-loss provisions and the need for some lenders to strengthen their balance sheets.
Banks’ profit declines
The 11 major banks listed on the Nigerian Exchange reported a combined profit before tax of approximately N6.4 trillion in 2025, compared with N6.7 trillion recorded 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 their combined profit before tax 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 among 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 in gross earnings growth, recording N5.5 trillion in 2025 against N4.9 trillion in 2024.
Zenith Bank followed with N4.1 trillion, compared with N3.8 trillion a year earlier, while GTCO’s gross earnings increased slightly from N2.11 trillion to N2.15 trillion.
First HoldCo also recorded an increase, with gross earnings rising to N3.4 trillion from N3.2 trillion.
UBA, however, recorded a marginal decline, with gross earnings falling to N2.97 trillion from N3.1 trillion.
CIS: Dividend differences reflect capital strength
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 the strategic priorities of individual banks.
She explained that 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.
For the banks that withheld dividends, Ahimie said preserving capital had become a priority.
She linked this to the banking sector’s recapitalisation programme, the need to strengthen balance sheets, increased provisioning for risk assets and regulatory restrictions on dividend payments where prudential requirements had not been fully satisfied.
Dividend suspension may affect investors
Ahimie noted that the immediate impact of the dividend suspension would be felt by income-focused investors who depend on regular dividend payments.
She said such investors could shift their preference towards banks with stronger capital positions and a history of consistent dividend payments.
Banks that suspended dividends could also experience short-term pressure on their share prices as investors reassessed their valuations and future income prospects.
However, she pointed out that retaining profits could ultimately benefit shareholders if the funds were effectively deployed to strengthen capital and support future earnings.
On the impact on customers, Ahimie said the absence of dividends should not automatically be interpreted as a sign of financial weakness.
She explained that retaining earnings could help banks improve their resilience, expand lending, invest in digital infrastructure and strengthen their capacity for future growth.
She added that stronger capital positions could increase confidence in the banking sector.
Looking ahead, Ahimie said the banking industry had a positive outlook, noting that banks that had completed their recapitalisation and met other regulatory requirements were likely to have more stable and predictable dividend policies.
Adonri: CBN blocked dividends to protect depositors
Investment analyst and Highcap Securities Limited executive, David Adonri, said the CBN prevented some banks from paying dividends because the regulator was not satisfied with their financial strength after reviewing their accounts.
He described the decision as a stringent regulatory measure designed to protect depositors, even though it could disappoint shareholders expecting dividend income.
Adonri explained that some banks had previously benefited from regulatory forbearance on the provisioning of doubtful loans.
When the forbearance expired, he said, some lenders were required to make full provisions, leaving them without sufficient retained profits to support dividend payments.
He also noted that some banks needed to preserve funds to meet outstanding foreign debt obligations, which could have been affected if substantial amounts of cash were distributed as dividends.
According to him, the CBN’s decision should encourage shareholders to pay closer attention to the financial condition and management practices of their banks.
He added that banking required strict oversight by regulators and shareholders to prevent abuses and protect the stability of the financial system.
Olayinka: CBN imposed regulatory discipline
Investment banker and chartered stockbroker Tajudeen Olayinka described the restrictions as a regulatory push-back aimed at forcing greater prudence among banks.
He said some of the affected lenders had significant write-offs arising from the expiration of regulatory forbearance, which could have weakened their balance sheets if dividends had been paid.
According to Olayinka, the CBN exercised its regulatory authority by withholding approval for dividend payments by banks whose financial positions did not justify such distributions.
He nevertheless expressed optimism about the future of the banking industry.
Olayinka said some of the affected banks had initially proposed dividend payments despite the outstanding provisioning requirements.
He explained that the issue was therefore not necessarily a lack of profit, but the CBN’s concern that paying dividends alongside substantial provisions and write-offs could be financially imprudent.
He also pointed to the exposure of some banks to the syndicated loan default involving Nestoil, saying the affected institutions had now made full provisions for the exposure.
Olayinka said the current regulatory approach would impose greater discipline and prudence on banks, which he considered positive for the industry and its stakeholders.
Kurfi explains why CBN stopped some banks
Financial analyst Mallam Kasimu Kurfi also attributed the dividend restrictions to the inability of some banks to adequately clean up their loan impairments.
He said the CBN governor had indicated that banks that failed to resolve their impairment issues were not permitted to pay dividends.
Kurfi further disclosed that one of the Tier-1 banks was restricted because of its exposure to a foreign banking subsidiary.
According to him, the exposure was about 20 per cent of the bank’s shareholders’ funds, exceeding the 10 per cent limit stipulated under CBN prudential guidelines.
He said the affected bank would need to either increase its shareholders’ funds or reduce its holdings in the subsidiary to bring the exposure within the regulatory limit before it could resume 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 the profits they report. https://applesbite.com/six-nigerian-banks-pay-n1-27trn-dividends-despite-regulatory-restrictions/
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