Nigeria’s biggest banks Access Holdings Plc, Zenith Bank Plc, and First Bank Holdings may suspend dividends payments until 2028 as they face mounting regulatory pressure from the Central Bank of Nigeria (CBN) to strengthen capital positions and address legacy exposures.
This development was revealed in a June 16 report by Renaissance Capital, which comes days after the CBN issued a circular on June 13, directing commercial banks to pause dividend payouts, defer executive bonuses, and halt offshore expansion until they resolve provisioning shortfalls and breaches of single obligor limits.
Renaissance Capital analysts predicted a prolonged dividend drought for some of Nigeria’s largest financial institutions.
“Our base case is that the banking arms of AccessCorp, Zenith Bank, and FirstHoldco will not resume dividends payments before 2028,” the report stated. “Most of their near-term cash flows will be directed towards absorbing provisioning costs and recapitalisation.”
Although these banks posted robust accounting profits in FY2024 with Access Holdings reporting N635 billion and Zenith Bank N867 billion their cash profits were negative. This was largely due to unrealised interest income on Stage 2 loans and foreign exchange revaluation gains, which do not reflect actual liquidity.
First Bank Holdings was particularly impacted in Q1 2025 after a single large loan turned non-performing, dragging its cash position into negative territory.
GTCO and UBA Stand on Firmer Ground
Meanwhile, GTCO appears to be an outlier among tier-one lenders. Having fully provisioned its exposures earlier, the bank is forecasted to continue paying dividends uninterrupted, supported by a strong N1.2 trillion in positive cash profits for FY2024.
United Bank for Africa (UBA) is also in a relatively stable position. The report forecasts that UBA could resume dividend payments by 2026, owing to its manageable legacy exposure and solid liquidity profile.
The June 13 circular by the CBN aims to enforce stronger risk management practices and ensure that banks recapitalize sufficiently in line with Nigeria’s evolving macroeconomic landscape.
The directive is viewed as part of broader reforms under CBN Governor Olayemi Cardoso, who has consistently emphasised banking sector stability and transparency since assuming office.
For shareholders of Access, Zenith, and First Bank Holdings, the delay in dividends payouts could reshape short-term investment outlooks. However, analysts believe these steps are necessary to preserve financial stability and long-term solvency within the sector.
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