THE DETERMINANTS OF DIVIDEND PAYOUT IN THE NIGERIAN BANKING INDUSTRY
THE DETERMINANTS OF DIVIDEND PAYOUT IN THE NIGERIAN BANKING INDUSTRY
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Date
2011-05
Authors
ABUBAKAR, NASIRUDEEN
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Abstract
Dividend policy in the Nigerian Banking Industry differs as each bank decides on
what, how and when to pay dividend to its shareholders. The purpose of the study
is to ascertain the determinants of dividend payout in the Nigerian banking
industry. The specific objectives were to determine the effect of profit after tax,
shareholders fund, liquidity, risk, and financial leverage on the dividend payout in
the Nigerian banking industry. The study used five sampled banks quoted on the
banking subsector of the Nigerian Stock exchange as at December 2008.
Secondary data were used for the research work and the data were obtained from
Nigerian stock Exchange (NSE) Fact Books from 2001 to 2008 and the financial
Statement of the sampled banks for all the years covered by the study. The
variables used were the dividend payout, profit after tax, shareholders fund,
liquidity represented by cash and bank balances with central bank of Nigeria, risk
represented by loan loss provision and financial leverage represented by long term
borrowing. The analytical technique used was the multiple regression analysis.
The findings reveal that profit after tax, shareholders fund, liquidity, risk and
financial leverage are major determinants of dividend payout of banks in Nigeria,
while liquidity and risk are the most critical factors determining dividend payout of banks in Nigeria. Nigerian Banks should improve their liquidity position byretaining more earnings and reducing loan loss
Description
A THESIS SUBMITTED TO THE POST-GRADUATE SCHOOL,
AHMADU BELLO UNIVERSITY, ZARIA IN PARTIAL
FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF
M.Sc. ACCOUNTING AND FINANCE
Keywords
DETERMINANTS, DIVIDEND, PAYOUT, NIGERIAN, BANKING, INDUSTRY