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Report: Only 6 Nigerian lenders meet central bank's dividend payment rule

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Report: Only 6 Nigerian lenders meet central bank's dividend payment rule

Only six lenders — Access Bank Plc, Zenith Bank Plc, Guaranty Trust Bank Plc, First City Monument Bank Ltd., Wema Bank Plc and United Bank for Africa Plc — have met the Central Bank of Nigeria's ruling on dividend payouts for commercial banks and discount houses, Daily Post Nigeria reported Feb. 20, citing a report by investment and research firm Afrinvest West Africa.

The ruling stipulates that commercial banks with nonperforming loan ratios over 10% will not be allowed to pay dividends, Reuters said in a separate same-day report.

Shares in midsize banks in the country weakened the same day, with those of Unity Bank Plc and Sterling Bank Plc dropping by more than 9%, on top of losses of more than 4% a day earlier, the newswire reported. The decline reflects investor concern regarding the dividend ruling, it noted.

Two central bank officials reportedly said four lenders have too many NPLs and are operating with liquidity ratios less than the minimum requirement. Meanwhile, Afrinvest West Africa said all banks under its coverage except Unity Bank and Union Bank of Nigeria Plc meet the central bank's requirement, according to Daily Post Nigeria.

A steep fall in commodity prices since 2014 has led to the country's banks' NPLs stacking up, Reuters said.