AWC ECONOMY DESK
The Central Bank of Nigeria (CBN) has suspended dividend payments for certain banks, reports say. Though it is inaccurate to say that the apex bank stopped all Nigerian banks from paying dividends.
The restriction, introduced in June 2025, targeted banks operating under regulatory forbearance—particularly those that had received concessions relating to credit exposures or breaches of the Single Obligor Limit. The CBN said the measure was necessary to strengthen capital buffers, improve balance-sheet resilience and ensure that banks retained sufficient internal resources.
The policy has now become more visible in the 2025 financial-year dividend season, with a significant divergence between Nigerian banks that were able to reward shareholders and those that were not.
What exactly did the CBN order?
In its June 13, 2025 directive, the CBN ordered banks benefiting from the relevant regulatory forbearance to:
- suspend dividend payments to shareholders;
- defer bonuses to directors and senior management; and
- refrain from making investments in foreign subsidiaries or launching new offshore ventures.
Importantly, the suspension was described as temporary, not a permanent abolition of shareholders’ entitlement to dividends. It was to remain until the affected banks exited the forbearance arrangements and their capital adequacy and provisioning positions were independently verified as compliant with applicable standards.
The impact is now evident
As of August 2026, the consequences are reflected in the results of the major listed banks.
Financial Vanguard reports that six major banks paid a combined ₦1.27 trillion in dividends for the 2025 financial year, while five other profitable lenders did not pay dividends because they could not satisfy the CBN’s prudential requirements. The banks that paid included GTCO, Zenith Bank, Stanbic IBTC, Ecobank Transnational Incorporated, Wema Bank and FCMB.
GTCO and Zenith accounted for the overwhelming majority of the reported payout, with GTCO paying about ₦429.83 billion and Zenith about ₦410.70 billion.
This is perhaps the clearest evidence that the policy is selective rather than industry-wide.
Profit does not automatically mean dividend
This is the most important point for shareholders.
A bank can announce a huge profit and still be unable to distribute part of that profit as dividend if its regulatory capital, provisioning or other prudential indicators do not satisfy the CBN.
Access Holdings provides a striking example. The group reported a record ₦743 billion profit after tax for 2025, yet shareholders did not receive a dividend for that year because of regulatory constraints. Its chairman, Aigboje Aig-Imoukhuede, said the problem was not profitability but compliance with CBN requirements.
Access Holdings is working toward resolving its outstanding compliance issue, which includes a CBN requirement concerning investments in foreign banking subsidiaries. The chairman said the group expects to achieve compliance within 2026 and resume dividends when the conditions are met.
Why is the CBN taking such a hard line?
The answer lies largely in the quality of bank assets.
Nigerian banks entered the period of regulatory tightening with significant exposures that had previously benefited from regulatory forbearance. As those concessions were unwound, banks were required to make fuller provisions for potentially problematic loans.
THISDAY reported that nine banks collectively recorded about ₦3.2 trillion in loan-loss provisions in 2025, substantially affecting the amount available for distribution to shareholders.
For some institutions, the issue was therefore not simply, “Did the bank make money?” but rather, “After properly recognising potential losses and satisfying capital requirements, how much distributable capital remains?”
That distinction is crucial.
Is the CBN protecting depositors at the expense of shareholders?
To some extent, yes—but that is precisely the regulatory trade-off.
A bank’s first responsibility is not to maximise short-term dividend payments. It must remain sufficiently capitalised to absorb losses, protect depositors and continue lending.
The CBN itself has framed the restriction around strengthening capital buffers and ensuring that banks retain resources to meet existing and future obligations.
From this perspective, allowing a bank with unresolved provisioning or capital weaknesses to distribute billions of naira to shareholders could amount to transferring capital away from the institution at precisely the moment it needs additional financial strength.
However, there is a legitimate shareholder concern.
Investors buy bank shares partly because of the expectation of dividends. A prolonged restriction can reduce the attractiveness of affected stocks, weaken investor confidence and put pressure on share valuations. Analysts have also noted that investors may increasingly favour banks with stronger capital positions and more predictable dividend histories.
The bigger issue: Nigeria’s banking recapitalisation
The dividend restrictions are also occurring against the backdrop of the CBN’s wider banking-sector recapitalisation programme.
The CBN’s new capital requirements require banks to build significantly larger capital bases, with the deadline for meeting the recapitalisation requirements set for March 31, 2026. The exercise is intended to make Nigerian banks stronger and better positioned to support a larger economy.
Thus, the dividend policy should not be viewed in isolation.
The CBN is effectively saying to affected banks: strengthen the balance sheet first, reward shareholders later.
That approach may be painful for investors in the short term, but regulators would argue that a stronger bank ultimately creates greater long-term value for both depositors and shareholders.
The good news for shareholders
There is an important distinction between suspension and cancellation.
The CBN did not abolish dividends for Nigerian banks. The restriction applies to banks that remain within the specified regulatory-forbearance/compliance framework. Banks that meet the necessary prudential conditions can continue to pay dividends.
Indeed, the ₦1.27 trillion paid by six major banks in respect of 2025 demonstrates that dividend payments remain very much alive in Nigeria’s banking sector.
Moreover, the CBN’s official position indicates that the restrictions are linked to the affected banks exiting forbearance and achieving independently verified compliance.
What should shareholders watch next?
For investors, the most important indicators are no longer profit figures alone.
They should closely examine:
- Capital adequacy ratios
- Non-performing loans
- Loan-loss provisions and impairment charges
- Regulatory-forbearance exposure
- Foreign-subsidiary exposure
- Retained earnings
- The bank’s ability to satisfy CBN prudential requirements
A bank reporting spectacular profit but simultaneously recording enormous impairment charges may not have as much distributable strength as the headline profit suggests.
Bottom line
The claim that “CBN stopped Nigerian banks from paying dividends” is too broad.
The more accurate position is that the CBN restricted dividend payments by banks operating under specified regulatory forbearance arrangements and/or failing relevant prudential requirements.
The policy is controversial because it directly affects shareholders, but it is also part of a wider attempt to force Nigerian banks to clean up their balance sheets, strengthen capital and become more resilient.
The emerging picture in 2026 is therefore a two-speed banking sector: stronger, compliant institutions are paying substantial dividends, while banks still dealing with regulatory and balance-sheet constraints are being required to retain earnings.
For shareholders, the message is clear: in the new Nigerian banking environment, a bank’s profit is no longer enough; capital strength, asset quality and regulatory compliance increasingly determine whether that profit reaches your pocket.
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