Dividend Policy and Financial Performance of Deposit Money Banks in Nigeria

ABSTRACT The study examined dividend policy and financial performance of deposit money banks in Nigeria. This work further examined the relationship between dividend payout ratio and financial performance; analyzed the relationship between dividend yield and financial performance. Data were sourced through secondary method of data collection. The content validity of this instrument was carried out by the researchers in the department of Banking and Finance, Ambrose Alli University, Ekpoma. Data was analysed through ordinary least squares estimated techniques. Results showed that dividend policy ratio has a negative and insignificant impact on banks financial performance. This means that dividend policy ratio is not a major determinant of banks financial performance and firm size has positive and significant impact on the financial performance of deposit money banks in Nigeria. Arising from the above, it is recommended that there should be mandatory compliance and disclosure of corporate governance policies by banks designing and documenting robust internal control frameworks that will reflect each bank’s need and situation and there must be emphasis on the provision of banks with the relevant resources and supports that fosters the training and development of skilled banking staff to meet the challenges posed by #25 billion recapitalization.