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    The Impact of Dividend Policy On Commercial Banks Performance in Ghana

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    Andrew Tandoh
    This document summarizes a study that investigated the impact of dividend policy on the performance of commercial banks in Ghana. The study used panel data regression analysis to examine the relationship between bank performance, measured by return on equity, and dividend policy, measured by dividend per share. The results showed that dividend policy has a significant impact on bank financial performance. Additionally, factors like inflation, debt levels, and bank size also significantly impacted bank performance. The study recommends that banks improve communication of dividend policies to investors and that management consider inflation when making investment decisions.

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    The Impact of Dividend Policy On Commercial Banks Performance in Ghana

    Uploaded by

    Andrew Tandoh
    16 views12 pages
    This document summarizes a study that investigated the impact of dividend policy on the performance of commercial banks in Ghana. The study used panel data regression analysis to examine the relationship between bank performance, measured by return on equity, and dividend policy, measured by dividend per share. The results showed that dividend policy has a significant impact on bank financial performance. Additionally, factors like inflation, debt levels, and bank size also significantly impacted bank performance. The study recommends that banks improve communication of dividend policies to investors and that management consider inflation when making investment decisions.

    Original Description:

    Dividend policy on commercial banks

    Original Title

    Mphil.theresa Asiedu.pg1334913

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    This document summarizes a study that investigated the impact of dividend policy on the performance of commercial banks in Ghana. The study used panel data regression analysis to examine the relationship between bank performance, measured by return on equity, and dividend policy, measured by dividend per share. The results showed that dividend policy has a significant impact on bank financial performance. Additionally, factors like inflation, debt levels, and bank size also significantly impacted bank performance. The study recommends that banks improve communication of dividend policies to investors and that management consider inflation when making investment decisions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    16 views12 pages

    The Impact of Dividend Policy On Commercial Banks Performance in Ghana

    Uploaded by

    Andrew Tandoh
    This document summarizes a study that investigated the impact of dividend policy on the performance of commercial banks in Ghana. The study used panel data regression analysis to examine the relationship between bank performance, measured by return on equity, and dividend policy, measured by dividend per share. The results showed that dividend policy has a significant impact on bank financial performance. Additionally, factors like inflation, debt levels, and bank size also significantly impacted bank performance. The study recommends that banks improve communication of dividend policies to investors and that management consider inflation when making investment decisions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    THE IMPACT OF DIVIDEND POLICY ON

    COMMERCIAL BANKS PERFORMANCE IN


    GHANA
    By:
    Theresa Asiedu

    15th October,2016

    Introduction
    Shareholder wealth maximization is regarded as an
    over ridding objective of firms which reflects its
    value.
    The subject matter of dividend policy has assumed
    centre stage in the business environment for quite
    some time now (Nissim and Ziv, 2001).
    Universally, dividend policy has been viewed as a
    significant determinant of firm performance in both
    developed and developing countries. Ghana, a
    growing economy cannot isolate herself from this
    issue.

    Statement of Problem
    Despite attempt to resolve the issue surrounding
    payment of dividend, the explanation for dividend
    behaviour of firms is inconclusive.
    Therefore the question is should continue to pay
    dividend or retain the dividend to grow the firm?
    In Ghana, studies on dividend policy and bank
    performance is limited.
    This study therefore seeks to examines dividend
    policy and commercial banks performance in
    Ghana.

    OBJECTIVES OF THE STUDY


    General Objective:
    To investigate how dividend policy of commercial
    banks influence their performance.
    Specific Objective:
    1. To examine whether there is any significant impact of
    dividend policy on the performance of commercial banks.
    2. To identify other factors that influence the performance of
    the commercial

    Methodology
    Estimation technique : Panel data regression analysis
    Model specification
    The regression model developed basically relates the banks performance
    with the measure of dividend policy dividend per share.
    ROEit=0+1DPSit+2BSIZEit+3CARit+4Debtit+5INFit+ it ...1

    Where ;Commercial Bank Performance = Return on equity (ROE)


    Dividend policy = Dividend per share (DPS)
    Debt = Log of total liabilities
    Capital adequacy Ratio (CAR) = Ratio of Capital to Liabilities
    Inflation (Inf) = consumer price index
    Bank Size ( Size) = log of total assets , t=time, =error term, o=
    intercept , 1-5= coeficients, and i=cross sectional dimension

    Methodology (Contd)
    Data type and sources
    Secondary data (financial statements 2007-2015)
    Sample and sampling
    Sample frame - Commercial banks in Ghana
    Sampling
    - 18 commercial banks selected in Ghana

    Results
    Variables

    Results Contd

    Findings
    The overall findings of the study show that dividend policy
    has significant impact on their financial performance.

    This confirms the signaling hypothesis, suggesting that for


    management to bridge the gap between them and investors,
    management must employ dividend policy to convey private
    information which is only available to them to their
    shareholders.
    The results show that factors including inflation, debt and
    bank size have significant impact on the financial performance
    of the commercial banks in Ghana.

    Recommendations
    Bank regulators should put up a policy that will require the
    commercial banks to communicate their dividend information on
    their corporate website.
    Commercial banks should have a strategic distributional policy on
    dividend to encourage investment from investor communities as
    most investors depends on firm dividend communication to invest.
    Management of commercial banks should include in their decision
    making process the dynamics of inflation in order to make an
    informed investment decisions.

    CONCLUSION
    The overall findings of the study shows that
    dividend policy of the commercial banks has
    significant impact on their financial
    performance.
    Similarly, the results show that factors
    including inflation, debt and bank size have
    significant impact on the financial
    performance of commercial banks in Ghana

    Thank You

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