It is instructive to note that this is not the first time CBN is specifying policies to guide DMBs and DHs on dividend payout. It is from section 16(3) of BOFIA that CBN derives its power to vary the proportion of net profits banks can make to the reserve fund each year. As it were, it is no longer news that the situation of non-performing credits in banks is getting worse every passing year. If the CBN’s dividend payout policies are complied with, they will encourage aggressive debt recovery by banks, reduction in the quantum of non-performing credits and growth in banks’ capital funds. They may also prevent a return to the sad bad-loan-in-banks era that brought about the creation of the Asset Management Corporation of Nigeria (AMCON) as an undertaker for banks’ bad loans.

Source: The Guardian March 08, 2018 03:33 UTC