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Shareholder payouts reached an unprecedented $1.66 trillion in 2023, marking a significant milestone in global financial markets, as revealed in a new report by British asset manager Janus Henderson.
The latest edition of the Global Dividend Index report, published on Wednesday, highlights a 5% year-on-year increase in payouts on an underlying basis, with a notable 7.2% surge observed in the fourth quarter compared to the previous three months.
The report attributes nearly half of the world’s total dividend growth to the banking sector, which witnessed record payouts driven by robust profits fueled by high interest rates that bolstered lenders’ margins. Major banking institutions, including JPMorgan Chase, Wells Fargo, and Morgan Stanley, announced plans to raise quarterly dividends after passing the Federal Reserve’s annual stress test, underscoring the sector’s resilience and profitability.
Additionally, post-pandemic recovery efforts contributed to the full restoration of payouts, notably exemplified by HSBC. However, the banking sector’s positive performance was tempered by dividend cuts from the mining sector, with significant reductions from major companies such as BHP, Petrobras, Rio Tinto, Intel, and AT&T offsetting some of the gains.
Despite challenges, the report highlights that 86% of listed companies worldwide either increased dividends or maintained them at current levels in 2023. A record number of 22 countries, including the U.S., France, Germany, Italy, Canada, Mexico, and Indonesia, witnessed historic payouts, underscoring the global reach of dividend growth.
Europe emerged as a “key engine of growth,” with payouts rising by 10.4% year-on-year on an underlying basis. Looking ahead to 2024, Janus Henderson anticipates total dividends to surpass $1.72 trillion, reflecting a projected underlying growth rate of 5%.
Commenting on the findings, [Your Name], [Your Position] at [Your Company], said, “The record-breaking shareholder payouts in 2023 underscore the resilience and dynamism of global financial markets, driven in large part by the banking sector’s stellar performance. As we navigate evolving economic landscapes, dividends continue to play a vital role in delivering value to investors worldwide.
