Central Bank of Nigeria dividend restrictions impact major banks

Major Nigerian banking groups, including United Bank for Africa (UBA), Access Holdings, and First HoldCo, are facing challenges in resuming dividend payments due to restrictions imposed by the Central Bank of Nigeria (CBN). The June 2025 directive required banks with unresolved loan-forbearance exposures to suspend dividends, defer executive bonuses, and halt new offshore investments until they made adequate provisions and complied with single-obligor limits.

The regulatory move follows the expiration of pandemic-era relief that allowed banks to restructure loans without immediate impairment classification. Consequently, lenders have had to recognize accumulated losses. This has created a gap between profitability and shareholder returns; while five other Nigerian banks paid N917.9 billion in dividends for the 2025 financial year, UBA, Access Holdings, and First HoldCo paid none.

Financial performance varies among the affected institutions. UBA reported a 47.3 percent decline in profit before tax to N423.4 billion in 2025, with dividends falling to 25 kobo per share from N5 in 2024. First HoldCo saw a 70.6 percent decline in profit before tax to N234.3 billion in 2025 due to N748 billion in loan-loss provisions. Although Access Holdings reported a 16.2 percent increase in profit before tax to approximately N1.01 trillion, regulatory constraints prevented the distribution of the proposed final dividend.