DETEREMNAT OF DIVIDEND PAY-OUT DECSION: EVIDANCE FROM ETHIOPIAN PRIVATE COMMERCIAL BANKS

Abstract

This research is investigating the determinants of dividend payout in Ethiopian private banks. Ten years data from 2011/12 to 2020/21 were collected from National Bank of Ethiopia’s reports and banks audited financial statement. Eight private banks are selected. The variables that are used in the study are dividend payout as dependent variable and independent variables are Prof-itability, liquidity, leverage, Last Year Dividend, growth, risk and firm size. The collected data were analyzed using panel data regression technique. The finding indicated that among the sev-en independent variables; last year dividend payout, growth, size and risk have statistical sig-nificant impact on dividend payout the rest liquidity, profitability and leverage have no statisti-cally significant impact on dividend payment Therefore, last year dividend, growth, size and risk have a significant impact on dividend payout in Ethiopian private banks so, board of directors and management of banks need to consider these variables while designing their dividend payout policy; on the same token investors need to consider these variables in their investment decisions when they want to make an investment in Ethiopian private banks.