EARNINGS MANAGEMENT AND DIVIDEND PAYOUT OF NIGERIAN LISTED MONEY DEPOSIT BANKS

Abstract

Banks in Nigeria are exposed to liquidity and solvency problems due to huge non-performing loans
yet they can manage to pay dividend. This study examines whether dividend payout, profitability,
tax rate and size influences earnings management of Nigerian listed deposit money banks. The
research is a post-positivism paradigm that relied on secondary sources of data extracted from
the financial statements of the banks that made the sample of the study. The population of the study
is the 14 listed money deposit banks in Nigeria for period ranging from 2010 to 2019. Regression
techniques aided the analysis of data. Findings revealed that Dividend payout, profitability, size
and tax rate influences earnings management of deposit banks at less than 1% level of significance.
Based on the finding, the study concludes that banks manipulate profit in order to pay less tax and
more dividend despite its liquidity problems and the existence of huge nonperforming loans. The
study recommends the sustainability of CBN policy on liquidity position and thresholds regarding
payment of dividend. Secondly the study recommends that banks pursue a conservative working
capital management policy that will secure their future liquidity position.