Contrary to advice from the International Monetary Fund (IMF)’s article to banks regarding halting dividend payment, Zenith Bank and Guaranty Trust Bank are considering paying interim dividends to shareholders following the release of their latest unaudited results
In a recent publication on its website, the Managing Director, IMF, Kristalina Georgieva, suggested that banks should halt dividend payment for now over expectation of a deep recession in 2020 and partial recovery in 2021, when banks’ resilience will be tested. Georgieva further added that having in place strong capital and liquidity positions to support fresh credit will be essential and reinforce banking sector buffers in retaining earnings from ongoing operations which are not insignificant.
But, in a notice sent to the Nigerian Stock Exchange (NSE) at the weekend, Zenith Bank’s board of directors indicated it was set to meet on July 23, 2020 to consider the Tier-1 bank’s audited financial statements for half-year 2020. The directors will also consider the proposal for recommendation of interim dividend for shareholders.
In a similar development, GT Bank said in a statement that issues relating to half-year dividend may also be discussed when its board of directors meet later this month.
Speaking to Daily Sun via a telephone interview, National Coordinator, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said the IMF should have advised the Nigerian government to pay its citizens stimulus package and not advise banks to suspend payment of dividend.
“The banks are healthy and doing very well and have made a lot of profit from which they intend to pay shareholders. Without shareholders, then a company or bank cannot exist. IMF should advise banks to pay dividend to shareholders in the face of this pandemic because we are suffering. America, Canada and other European economies are paying citizens stimulus packages and so they should have advised the Nigerian government to follow in that order of giving us stimulus package. But since it was not done, our investment and savings is what we are currently benefitting from”.
We are commending the banks that have paid dividend and this would even solidify the bank even in the next financial year as they did not have to dip into their reserve to pay us, but from real profit they made in which they have already distributed. If the banks are not in the position to pay, we the shareholders have the right to tell them not to, not the IMF.