Traders work on the trading floor of the New York Stock Exchange (NYSE) on March 5, 2024 in New York City, the United States.
Brendan McDermid | Reuters
LONDON – Global dividend payments to shareholders will reach a record $1.66 trillion in 2023, according to a new report from British asset manager Janus Henderson.
The Global Dividend Index report released on Wednesday said that basic dividends increased by 5% annually, with the fourth quarter increasing by 7.2% compared with the previous three months.
Underlying figures are adjusted for the impact of exchange rates, one-time special dividends and technical factors related to the dividend calendar, as well as index changes.
The banking sector accounted for nearly half of total global dividend growth, with record payouts as high interest rates boosted lenders’ profit margins, the report found.
Last year, major banks including JPMorgan Chase & Co., Wells Fargo & Co. and Morgan Stanley announced plans to raise quarterly dividends after passing the Federal Reserve’s annual stress test, which determines how much capital banks can return to shareholders.
“In addition, the lingering catch-up effect after the epidemic means that spending has fully recovered, especially in HSBC”, adds Janus Henderson’s report.
“Emerging market banks contributed particularly strongly to this growth, although Chinese banks did not participate in the banking sector’s dividend boom.”
However, Janus Henderson said the positive impact from bank dividends was “almost completely offset by cuts in the mining sector”.
Reports indicate that some large companies have slashed their dividends, e.g. BHP Billiton, brazil, Rio Tinto, Intel and AT&T Diluting this year’s underlying global growth rate by two percentage points masks significant broad-based growth in many parts of the world.
“A key engine for growth”
Janus Henderson said that by 2023, about 86% of listed companies globally will increase dividends or maintain dividends at current levels.
Last year, spending hit record highs in 22 countries, including the United States, France, Germany, Italy, Canada, Mexico and Indonesia.
Europe has been described as a “key engine of growth”, with basic spending increasing at an annual rate of 10.4%.
Janus Henderson expects total dividends to reach $1.72 trillion in 2024, equivalent to an underlying growth rate of 5%.
—CNBC’s Hugh Son contributed to this report.
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