GTBank, UBA, FCMB, 4 others not affected by dividend policy
As reactions continue to trail tough dividend rules recently introduced by the Central Bank of Nigeria (CBN), analysts at SBG Securities have said that seven lenders are not affected by the policy from a Capital Adequacy Ratio (CAR) perspective and using 9M 2017 unaudited figures.
The analysts in a report obtained by correspondent, listed the banks not restricted from paying dividend by the policy to include Zenith, GTB, UBA, Access, Fidelity, Stanbic IBTC and FCMB.
Specifically, they stated that going by the results released in Sep 2017, most of the banks not restricted from paying dividend have either exceeded or are close to their 2016FY profit level.
For instance, the analysts noted that Fidelity Bank with a PBT of ₦16.2billion in Sep 2017 has done 147% of its 2016FY profit; Sterling with its ₦6.6 billion PBT in Sep 2017 has done 131% of its 2016FY profit while Stanbic has already recorded 123% of its 2016FY PBT as at Sep 2017.
Other banks close to their 2016FY profit, according to the analysts, include Zenith, GTB and UBA.
Furthermore, the analysts predicted :”We estimate 21% average growth in dividend per share for our coverage banks in 2017e,driven primarily by strong earnings growth.
“Within our coverage, we expect the tier 1 banks to continue to dominate in absolute dividend paid and dividend pay-out ratio, driven by a combination of their more robust earnings generation capacity and stronger capital positions, putting them under less pressure to retain more earnings. We estimate dividend yields of 7.4%, 7% and 5.5% for UBA, Zenith and Access respectively as at 19 Feb 2018 prices.”
However, the analysts also stated : “banks, which belong to a HoldCo structure such as FBNH can typically still pay dividend, which would be derived from their non-bank subsidiaries.
Also, ETI group (parent company for Ecobank Nigeria) is not regulated by the CBN, as such, this directive does not apply to them. In relation to the fourth
condition as listed above, our dividend pay-out estimates are in line with the regulation as we have previously emphasized the need for a reduction in dividend pay out to build buffers.”
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