Dividend Yield and Performance of Quoted Banks in Nigeria

Abstract

This study investigated the effect of dividend yield on firm performance, using return on assets as a measure of performance. The study employed ex-post facto research design and secondary data obtained from the financial statements of selected firms for the period 2015-2024. The sample covered eleven (11) selected deposit money banks based on data availability. Data were analysed using descriptive statistics and ordinary least squares regression analysis. Regression analysis reveals a significant negative relationship between dividend yield and bank performance, indicating that higher dividend payouts are associated with lower ROA. The model explains a substantial portion of the variation in performance and is statistically significant, highlighting the critical role of dividend policy in shaping financial outcomes. The findings suggest that banks should adopt dividend strategies that balance shareholder returns with retained earnings for reinvestment, in order to enhance long-term profitability and overall financial performance.