Impact of Dividend Payout Ratio on Financial Performance of Listed Deposit Money Banks in Nigeria

This study focuses on how Dividend Payout Ratio affects the financial performance of Nigeria's listed deposit money banks. Using panel data from ten deposit money banks spanning ten years (2014-2023), the study uses both descriptive and regression analysis to investigate the relationship between Dividend Payout Ratio and corporate performance metrics such as return on capital employed (ROCE) and earnings per share. Descriptive statistics show that major financial measures vary significantly across the studied banks. A regression study, specifically the Fixed Effect Model based on the Hausman test, shows that Dividend Payout Ratio has a positive and substantial effect on ROCE. At the same time, its effect on EPS is favorable and statistically significant. Additional data indicate that bank age and leverage play a significant role in influencing ROCE, while bank size has a negative impact. And also, all variables except LNBS have a significant impact on EPS. LNBS adversely affects EPS, with a coefficient of -0.0463. DPR, BA, and LV are all positively correlated with EPS, implying that increasing these factors improves EPS. The study therefore recommend that deposit money banks can promote investor trust by exhibiting a steady and attractive Dividend Payout Ratio, perhaps leading to higher investment and shareholder loyalty. The study suggests that, further research on this topic should take into cognizance cross-national investigations, which could build a comparative analysis.