Record dividend likely for banks’ shareholders

New Delhi Indian banks look set to reward shareholders with the highest dividend in at least seven years. The country’s banks are forecast to take their share in aggregate payout across all sectors to 13 per cent for the year ending March 31, 2024, according to S&P Global Market Intelligence. This is up from 12 per cent for the fiscal year ended March 31, 2023, and nine per cent in the year ended March 31, 2022.

This is a sharp rebound from just one per cent in 2020, when the Reserve Bank of India (RBI) asked lenders to conserve cash and suspend dividend payments due to Cvoid-19. HDFC Bank, which declared a special dividend to commemorate 25 years of its operation, was the only major lender to make a payout for 2020. Indian banks’ share in aggregate dividends stood at 7.6 per cent in the fiscal year ended March 2017 and five per cent each in the following two pre-pandemic years, according to Market Intelligence data.

“Banks remain well-positioned to capitalize on opportunities in the Indian economy and banking industry,” said Tusharika Aggarwal, a dividend forecasting research analyst at S&P Global Market Intelligence.

“India’s brisk economic activity will likely sustain high credit growth, resulting in excellent earnings forecasts for Indian banks,” Aggarwal said.