EQUITY SHAREHOLDING STRUCTURE AND DIVIDEND POLICY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

Dividend payment is discretionary and managers of the company may not engage in highly profitable ventures that would leave enough distributable profits for the shareholders if they are not co-owners of the equity shares of that company. The main objective of this study therefore was to ascertain the effect of equity shareholding structure on dividend pay-out policy drawing samples from deposit money banks listed on the floor of Nigeria Exchange Group Market from 2013 to 2022. Managerial equity shareholding, foreign equity shareholding, institutional equity shareholding, public equity shareholding and family equity shareholding were the measures of equity shareholding structure employed in this study while dividend pay-out was the proxy for dividend policy. Ex post facto research design was adopted, secondary data were employed, and purposive sampling technique was employed to select 12 deposit money banks. To test the hypotheses of the study, the study employed robust regression technique and the statistical package employed was STATA 14. From the analysis, it was found out that foreign shareholding institutional shareholding and family shareholding significantly affect dividend payment of listed deposit money banks in Nigeria. Also, it was found out that managerial shareholding, and public shareholding has an insignificant effect on dividend pay-out of deposit money banks in Nigeria. Thus, it was concluded that equity shareholding structure significantly affects dividend policy of deposit money banks in Nigeria. Based on these findings, it was recommended that management of deposit money banks should be encouraged to own significant percentage of the equity share capital of these banks. Also deposit money banks in Nigeria should promote institutional equity shareholding by maintaining good equity governance practices, transparency and stable financial performance as this would put the company on sustainable path in the long run.

 Keywords: Equity Shareholding Structure, Dividend Policy, Listed Deposit Money Banks, and Nigeria.