Four Banks Pay N139bn Interim Dividend as Fidelity Offers Highest Yield

Nigeria’s largest banks have been consistently paying dividends and maintaining healthy payouts, a sign of long term stability and resilience even amid a volatile macroeconomic environment.

Of course, banks are high yield dividend stocks value investors will like to add to their portfolios just as the new recapitalization scheme of the regulator is going to bolster their capital buffers and make them impervious to macro shocks.

Zenith Bank Plc, Guaranty Trust Holdings Company (GTCO) Plc, United Bank for Africa Plc, and Stanbic IBTC Holdings, collectively paid N138.58 billion in interim dividends to their shareholders, according to data gathered by MoneyCentral.

A breakdown shows Zenith Bank paid N51.33 billion; Stanbic IBTC, (N39.75 billion); GTCO, (N36.43 billion); and UBA, (N11.05 billion).

Among the companies with the biggest commitment to returning profits to shareholders, Fidelity Bank stands out for its high yield as it has a dividend yield of 10.27 percent that offers an attractive stream of income for investors who wishes to magnify their portfolio.

Access Holdings has a dividend yield of (10.04 percent); Zenith Bank, (7.63 percent; GTCO, (8.82 percent); UBA, (7.42 percent); WEMA Bank, (5.41 percent), and Stanbic IBTC, (5.17 percent).

Despite a disappointing second quarter that saw big banks’ profit slump on the back of the disappearance of foreign exchange exchange gains, analysts are sanguine that some lenders are well positioned to continue to deliver higher returns to their owners.

“We expect both GTCO and Zenith to unlock further value for shareholders, driven by distinct but supportive catalysts,” said analysts at Chapel Hill Denham Limited.

“For GTCO, its recent capital raising and subsequent dual listing on the London Stock Exchange are likely to enhance visibility, broaden investor participation, and serve as a re-rating trigger,” said analysts at Chapel Hill Denham.

Banks trade at an attractive valuation that indicates an appropriate entry point for investors.

Wema Bank trades at a price to earnings ratio of 0.70x; Access Holding (1.45x); UBA, (2.02x); Fidelity Bank, (2.25x); Zenith Bank, (2.51x); GTCO, (5.20x), and Stanbic IBTC, (5.13x).

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