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Zenith Bank And GTBank Considers Paying Interim Dividends Despite COVID-19

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Zenith Bank, one of the tier-1 bank’s in Nigeria will be having a Board of Directors meeting on the 23rd of July, 2020 towards the consideration of the H1 2020 audited financial statement. According to a notice that was sent by the Bank to the Nigerian Stock Exchange, “the proposal for the recommendation of interim dividend for shareholders” will be discussed. Similarly, one of the other tier-1 banks, GTBank said in a statement to the NSE that “issues relating to half-year dividend may also be discussed” when its board of directors meets later this month.

This is not much of a surprise to shareholders and the market in general. The two most profitable banks in Nigeria Zenith Bank and GTBank, have always paid interim dividends to their shareholders.

However, as a way of reacting to the bearish market, by cutting down on costs, in view of COVID-19 and its attendant economic implication, analysts had earlier predicted that many banks may hold off on dividend payments due to the uncertainty hitting the market. 

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Seeing that Zenith Bank and GTBank, against the backdrop of the pandemic economy, are considering interim dividends is amazing. However, a lot of the Banks across the globe has been advised on dividend payouts while some were advised not to pay dividend at all.

How Other Banks Across The World Are Treating Their Investors As Regards Dividends

Furthermore, putting this in perspective, as regards conserving capital amid the pandemic, the Economic Times reported sometime in April that the Reserve Bank of India advised Indian banks to suspend dividend payouts. 

In addition, regulators in the European banking system also banned European banks from paying any dividend in 2020. However, it was slightly different in Australia, as the banks were advised to slash their dividend payouts. 

Meanwhile, in the United States, according to the New York Times. The Federal Reserve announced in June that it will temporarily restrict dividend payouts by some of the country’s biggest banks.

The COVID-19 pandemic is expected to adversely impact different sectors of the Nigerian economy, including the financial institutions. Meanwhile, the Banking Industry Risk Indicator (BIRI) in Nigeria stands at a score of 12.14 out of 100. This analysis was recently carried out by Fitch Solutions.

A closed period for trading in Zenith bank’s stock will start from July 6th, 2020. The closed period will last until 24 hours after the company’s half-year 2020 financial report is released to the public.

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