Bank directors’ dividends rise to N30bn despite CBN’s restrictions
DESPITE the last minute directive by the Central Bank of Nigeria, CBN, that restricted banks’ dividend pay-outs, leading banks which are quoted on the Nigerian Stock Exchange, have ended their 2018 annual general meetings (AGMs) for the 2017 financial year doling out a total dividend of N225.012 billion, indicating a 25.6 percent increase over N179.165 billion paid last year on 2016 financial results. Moreover, their directors collected N30.217 billion representing 38.8 percent up-shoot in their dividend income as against N21.771 billion last year.
The apex bank had intended to discourage high dividend pay-outs by banks on the heels of worsening non-performing loans which was eroding banks’ capital adequacy. The policy would then force the banks to plough back their profits to beef up their capital.
However, about five banks, namely Ecobank Transnational Inc Plc, Diamond Bank Plc, Union Bank Plc, Jaize Bank Plc, and Wema Bank Plc, may have been caught in the CBN net forcing their shareholders and directors to go home empty-handed. Another two, Unity Bank and Skye Bank, are yet to make their status public. The nine banks that escaped CBN’s restrictions include Zenith Bank Plc, Guaranty Trust Bank Plc, United Bank for Africa, UBA Plc; FBN Holdings Plc, Stanbic IBTC Holdings Plc, Access Bank Plc, Fidelity Bank Plc, FCMB Group Plc and Sterling Bank Plc.
The directors’ dividend in the nine banks accounted for 13.4 percent of the total dividend declared by the banks.
Financial Vanguard’s analysis showed that three of the banks, Zenith Bank, GTBank and Access Bank Plc accounted for 85.9 percent of the total dividend declared by the nine banks, while their directors took home N23.092 billion, representing 76.42 percent of the total dividend received by the 126 directors during the year.
Further analysis showed that the chairman of Zenith Bank Plc, Mr. Jim Ovia; UBA Plc’s chairman, Mr. Tony Elumelu and Herbert Wigwe, Group Managing Director, Access Bank Plc benefited the most, accounting for N15.94 billion, representing 52.75 percent of the total dividend received by the 126 banks’ directors and 7.1 percent of the total dividend declared by the nine banks.
Capital market operators opined that the increase in dividend is expected on account of the surge recorded in the banks’ 2017 financial results, which was largely in line with expectations. In the same vein, shareholders of the banks said the dividend payment is commendable given the regulatory headwinds in the banking sector and the difficult operating situation the banks were exposed to.
According to them, the directors are deserving of the dividend they earned, having worked to build the banks to the level they are.
Speaking to Financial Vanguard, Mr. Chibuzo Eke, a member of Independent Shareholders Association of Nigeria, ISAN, said: “The companies have obligations, not only to the government, but also to shareholders. If you toe that line, you will discover that the increase in dividend payment is good for the investors. As an investor, my motive of investing is to have my dividend and so, it is a welcome development.”
On increase in directors’ dividend, Eke, who said that the directors hold shareholders’ investment in trust, stated: “Remember that the directors hold chunk of the shares and they are also entitled to their dividend because they are also investors. So, they need to also have their dividend. The more shares you have, the more dividend you get. When you look at Jim Ovia for instance, he has a lot of shares and he got over N12 billion from dividend declared by Zenith Bank. He made the sacrifice and his wealth has grown. So, he needs to have his own dividend.”
Eke urged the banks that are still carrying high NPL to strive to recover such loans, saying that if that is done, it will add more to the shareholders’ dividend.
Shareholding by banks
Breakdown of the shareholding structure of the nine banks showed that the 126 directors hold 31.18 billion shares, which represents 12.6 percent of the nine banks’ total 247.459 billion outstanding shares.
Further analysis showed that 15 directors of Sterling Bank Plc hold 10.52 billion units out of the bank’s 28.79 billion issued share, representing 36.5 percent of the bank’s issued shares. This was followed by Zenith Bank Plc where the 14 directors hold 7.79 billion ordinary shares, which represent 28.9 percent of the bank’s 31.39 billion total shareholding as at the end of 2017.
UBA came third in terms of volume of shares held by its directors as the 19 directors hold 5.77 billion units, representing 16.9 percent of the 34.19 billion issued shares of the bank. The 17 directors of Access Bank Plc placed fourth with 2.91 billion shareholding, which accounts for 10.1 percent of the bank’s 28.93 billion issued shares. Stanbic IBTC Holdings Plc was the next with its nine directors accounting for 1.87 billion units or 18.6 percent of the bank’s 10.05 billion issued shares.
FBN Holdings, which has 11 directors ranked sixth with the directors accounting for 871.171 million units out of 35.89 billion ordinary shares of the bank in 2017; Fidelity Bank’s directors totalling 14, accounted for 394.23 million units of the bank’s 28.97 billion issued shares; GTBank Plc followed as the 15 directors hold 62.82 million shares out of 29.43 billion ordinary shares of the bank, while FCMB Group Plc came last with its 12 directors holding 41.62 million of shares of the 19.80 billion units of the bank’s issued shares.
Zenith, GTB, Access banks lead dividend
At the end of the year, 46 directors of Zenith Bank, GTBank and Access Bank received N29.047 billion dividend out of N193.304 billion dividend declared by the three banks, thereby accounting for 15.03 percent of the dividend declared by the three banks and 12.9 percent of the total dividend by the nine banks.
Zenith Bank’s directors received N21.033 billion or 24.8 percent of N84.77 billion dividend declared by the bank, while UBA directors took home N4.91 billion or 22.1 percent of the N22.23 billion declared by the bank. Access Bank’s directors which came third in the dividend ranking receiving N1.89 billion or 6.5 percent of N29.07 billion dividend paid by the bank.
Stanbic IBTC Holdings Plc’s directors got N934 million as dividend during the year out of N5.03 billion paid by the bank.
For FBN Holdings Plc, its directors went home with N174.234 million out of N8.97 billion declared by the bank in 2017, while directors of GTBank got N169.606 million out of N79.464 billion proposed by the bank. Fidelity Bank’s directors, on the other hand, went home with N43.365 million out of N3.19 billion dividend declared by the bank. FCMB Group’s directors received N41.62 million of the N1.98 billion dividend paid by the bank, while Sterling Bank’s directors got N21.04 million of the N575.81 million dividend declared by the bank during the year.
Top 10 directors by dividend received
Analysis of the top 10 earning directors showed that Jim Ovia, the chairman of Zenith Bank Plc towered above other directors, receiving N12.56 billion. Tony Elumelu, UBA chairman, trailed far behind with N1.93 billion, followed by Herbert Wigwe, the Group Managing Director/Chief Executive Officer of Access Bank, who received N1.75 billion and Ratan Mahtani, a non-executive director in Stanbic IBTC Holdings Plc, who got N634 million during the year.
Oba Otudeko, chairman of FBN Holdings Plc went home with N134.49 million, while Olusegun Agbaje, the Managing Director/Chief Executive Officer of GTBank took home N112.39 million.
Others are Adaora Umeoji, Deputy Managing Director of Zenith Bank, who got N89.99 million; Oye Hassan-Odukale, non-executive director at FBN Holdings Plc received N75.01 million; Kennedy Uzoka, Group Managing Director/Chief Executive Officer of UBA went home with N31.60 million, while Ifeoma Esiri, who is a non-executive director at Stanbic IBTC Holdings Plc came last, receiving N22.28 million.
Highest dividend earning directors by banks
In Stanbic IBTC Holdings Plc, Ratan Mahtani, a non-executive director, emerged the highest dividend earner, receiving N674 million, followed by Ifeoma Esiri another non-executive director with N22.28 million, while Yinka Sanni, the Chief Executive Officer emerged the third top earner with N2.50 million.
At FBN Holdings Plc, Oba Otudeko, the chairman, topped others, receiving N134.49 million, followed by Oye Hassan-Odukale, a non-executive director with N75.01 million, while Uke Eke, the Group Managing Director, got N14.57 million to close the list of top dividend earners in the bank.
For Zenith Bank Plc, Jim Ovia, the chairman, led others, carting away N12.29 billion. He was followed by Adaora Umeoji, the Deputy Group Managing Director, who got N25.25 million and Peter Amangbo, the Group Managing Director with N19.17 million. In Access Bank, Herbert Wigwe, the GMD/CEO, led others, receiving N1.75 billion. Obina Nwosu, Deputy Group Managing Director/Chief Operating Officer came second with N19.50 million, while Titilayo Osuntoki, executive director in charge of Business Banking, was the third with N18.76 million.
Olusegun Agbaje, the MD/CEO, GTBank emerged the highest dividend earner, receiving N112.4 million, followed by Ademola Odeyemi, Executive Director in charge of International Banking, who got N25.25 million and Mrs. Catherine Echeozo, Deputy GMD with N13.62 million.
In Sterling Bank, Mr. Sujit Varma, a non-executive director topped others with N5.1 million. Mrs. Egbichi Akinsanya, another non-executive director, placed second, receiving N3.38 million, while Mr. Michael Jibutoh, a non-executive director got N3.24 million to close the list of top three dividend earners in the bank.
Nnamdi Okonkwo, MD/CEO, Fidelity Bank was the highest dividend earner in the bank as he received N11.22 million, followed by Mrs. Chijioke Ugochukwu, Executive Director, Shared Services, with N8.16 million, while Mohammed Balarabe, Deputy Managing Director/Chief Compliance Officer, got N7.6 million.
At FCMB Group, Ladi Balogun, the CEO, came first with N20.02 million. Jademisi Balogun, non-executive director, placed second, receiving N19.05 million, while Jonathan Long, the chairman, came third with N1.11 million.
At UBA, the chairman, Tony Elumelu came first, receiving N1.93 billion, followed by Kennedy Uzoka, the GMD, who got N31.60 million and Mrs. Foluke Abdulrazaq, non-executive director, with N17.95 million.