Dividend smoothing, signaling and the global financial crisis: evidence from deposit money banks in Nigeria: 2008-2014

The study examines simultaneously the challenges associated with dividend signaling and smoothing. Several steps one of which will include empirically determining the relationship between dividend smoothing and signaling will be carried out. The paper will afterwards, make an effort to determine the impact of the global financial crisis GFC) on dividend stability of Deposit Money banks in Nigeria. Employing a seven-year (2008-2014) panel data for selected banks listed on the Nigerian stock exchange the study observed that dividend payout in Deposit Money Banks [DMBs] in Nigeria does not significantly follow a smooth and stable dividend policy as previous year dividend is positively related with dividend policy while earnings per share has a negative relationship with dividend policy. The global economic crisis between the periods 2008-2011 was also found to have significant impact on dividend policy in DMBs in Nigeria. A modified Ordinary Least Square [OLS] regression model was applied in line with Litner J. [1956] model. We further considered the Speed of adjustment indices and the target payout ratio.