Top 10 Dividend-Paying Banks in Nigeria: How CBN’s Recapitalisation Could Change Your Returns

• The Nigerian capital market is on fire, driven by strong banking stocks, which have been on a bullish run for several weeks
• The Nigerian banks, which are in a tight race to meet CBN’s recapitalisation target, are minting cash for investors
• These banks have exited CBN’s forbearance ban and are rewarding investors with juicy paychecks

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

For years, Nigerian banks have been a goldmine for investors looking for steady dividend income.

Strong profitability, a robust customer base, and a relatively stable regulatory environment have enabled them to reward shareholders generously year after year.

Why CBN’s recapitalisation matters

But now, the Central Bank of Nigeria (CBN) has thrown in a curveball—an aggressive recapitalisation drive that’s set to reshape the sector and test dividend policies like never before.

The CBN’s new directive significantly increases the minimum capital requirements for banks across all categories.

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The goal is to create a stronger, more resilient financial system capable of handling larger and more complex transactions.

However, the move means banks will need to raise substantial funds within a set deadline.

The top 10 dividend-paying banks to watch

This can be done through retained earnings, rights issues, private placements, or even mergers and acquisitions.

For dividend-hungry investors, that could mean some banks decide to keep more profits in-house—reducing payouts in the short term.

Despite looming changes, these institutions have consistently proven themselves as top dividend performers:

• Zenith Bank Plc – Renowned for stellar profits and unwavering dividend reliability.
• Guaranty Trust Holding Company (GTCO) – Consistently rewards shareholders with attractive payouts.
• United Bank for Africa (UBA) – Pan-African reach and steady dividend history.
• Access Bank Plc – Aggressive growth and acquisitions with a growing dividend record.
• Fidelity Bank Plc – Rising profitability and improving shareholder returns.
• Stanbic IBTC Holdings Plc – South African-backed strength and healthy dividend policy.
• First Bank of Nigeria Holdings (FBN Holdings) – A veteran player with potential despite past hurdles.
• Union Bank of Nigeria (now Titan Trust Bank) – Historical dividend relevance worth noting.
• Sterling Bank Plc (now Sterling Financial Holdings) – Solid shareholder reward culture.
• Ecobank Transnational Incorporated (ETI) – Regional banking force with consistent returns.

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Winners and losers in the new era

The recapitalisation push will separate the strong from the vulnerable.

Banks with weaker capital adequacy ratios may be forced to slash dividends and retain earnings.

Well-capitalised banks or those that can raise funds externally may keep rewarding investors without a hitch.

What investors should do

Investors need to monitor each bank’s capital adequacy ratio, profit trends, and announced capital-raising plans.

Short-term dividend cuts might sting, but banks that emerge stronger could deliver higher returns in the long run.

The Nigerian banking sector is entering a defining chapter. For investors, the key is staying informed, adaptable, and patient, because in the recapitalisation era, the biggest winners may be those who wait.

Eight banks emerge stronger, meet CBN recapitalisation drive

Legit.ng earlier reported that in a significant stride towards bolstering the stability and resilience of Nigeria's financial landscape, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has announced that eight commercial banks have successfully met the new recapitalisation threshold.

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This pivotal confirmation, made during the recent Monetary Policy Committee (MPC) meeting in Abuja, signals a robust and progressive movement within the banking sector, with other institutions steadily advancing towards full compliance.

The recapitalisation initiative, a strategic move by the CBN, aims to strengthen the capital base of Nigerian banks, enhance their capacity to absorb potential shocks, and ultimately foster a more robust and internationally competitive financial system.

Source: Legit.ng