Hold CBN’s excessive fines responsible for shrinking dividends pay out —Zenith Bank Tells Shareholders
Zenith Bank shareholders have raised concerns over what they describe as excessive regulatory fines imposed by the Central Bank of Nigeria (CBN), which they believe are significantly cutting into their returns. At the bank’s 2025 Annual General Meeting (AGM), investors attributed the lower-than-expected dividend payout for the 2024 financial year to a surge in penalties and taxes.
The bank declared a final dividend of N4.00 per share, bringing the total payout for 2024 to N5.00 per share—or N195.67 billion in total. But some shareholders say it could have been higher if not for regulatory penalties.
In 2024, Zenith Bank incurred a staggering N15.42 billion in penalties—up from just N21 million in 2023. These infractions span violations related to anti-money laundering, foreign exchange transactions, and regulatory compliance breaches.
Zenith is not alone. Access Bank Group paid N1.21 billion in 2024 penalties, up from N38 million a year earlier. GT Bank was fined N1.6 billion, compared to N73 million in 2023. UBA and Sterling Bank also saw fines spike to N400 million and N61 million respectively.
These fines are compounding an already heavy tax burden. In 2024, the federal government earned N1.2 trillion in taxes from just nine Nigerian banks—up 111.4% from the previous year. Meanwhile, total dividends to shareholders from these banks stood at N951.4 billion, representing an 87% increase but still seen by many investors as underwhelming in light of rising profits.
A further burden came via the Finance (Amendment) Act 2023, which introduced a windfall tax targeting gains from foreign exchange revaluations. Zenith Bank, GTCO, and UBA together incurred N172.3 billion in windfall tax liabilities last year. For Zenith alone, this meant an additional charge of N63.3 billion.
At the AGM, shareholders voiced their displeasure. Otunba Muktar said, “The penalties are too high. The CBN should issue warnings before imposing fines. Penalizing banks for every minor infraction is harsh and unfair.”
Another investor, Dr. Farouk Umar, criticized the cumulative tax burden, stating, “We pay corporate tax, withholding tax, education tax, and now windfall taxes. It’s too much for businesses and shareholders to bear.”
Okezie Boniface, lamenting Zenith’s N15 billion fine, added, “If not for this penalty, our dividend would have increased above N5 per share. These fines are dragging institutions down.”
Bank’s Response
Responding to the concerns, Zenith Bank’s new Group Managing Director/CEO, Adaora Umeoji, acknowledged the regulatory environment had become more stringent, but assured shareholders that the bank was taking steps to improve compliance and avoid future fines.
“The CBN has increased its monitoring and supervision. We are implementing measures to ensure compliance and safeguard shareholder value,” Umeoji said.
Experts Urge Proactive Compliance
Analysts say banks must do more to prevent infractions and protect investor interests. Investment expert Abiodun Adedotun remarked that recurring fines signal lapses in board oversight and risk management.
“If your bank continues incurring such huge penalties, it affects your dividend and makes the stock less attractive. Directors must ensure compliance is prioritized,” he said.
While the CBN insists that its sanctions are necessary to enforce discipline and preserve financial stability, investors are demanding a more balanced approach that fosters growth without punishing shareholders. The message from Zenith’s owners is clear: compliance must improve, or dividends will continue to suffer.
