ABSTRACT

The study examined the effect of dividend policy on the performance of quoted commercial banks in Nigeria (2000 – 2019). The specific objectives of the study were to examine the impact of dividend payout ratio on the performance of listed commercial banks in Nigeria, determine the impact of earnings per share on the performance of listed commercial banks in Nigeria, ascertain the impact of retention ratio on the performance of listed commercial banks in Nigeria and examine the impact of dividend yield on the performance of listed commercial banks in Nigeria. Secondary panel data was used for the study. The data was sourced from annual reports of the selected commercial banks in Nigeria. The population of the study comprises thirteen (13) listed commercial banks in Nigeria. The study used cluster sampling approach to select the eight (8) commercial banks on Nigeria stock exchange. The study adopted ex-post facto research design. The stated hypotheses were analyzed with Panel data estimation techniques including pooled ordinary least square (OLS) estimation, fixed effect estimation, random effect estimation, post estimation test such as restricted F-test and Hausman test. The study discovered that retention ratio, earnings per share, dividend pay-out ratio and dividend yield have no significant effect on share price of commercial banks in Nigeria. Therefore, the study concludes that dividend policy does not have significant effect on the performance of listed commercial banks in Nigeria. The study recommended that the board of directors should formulate and revise dividend policy by taking into consideration the factors that have been evidenced to exercise significant influence on dividend payment. It implies that commercial banks should set up a policy that would positively influence their share price. Also, commercial should pay more attention to the factors that influences share price in relation to dividend policy. These factors would help in enhancing bank performance.