An Analysis of Corporate dividend Performance in Select Banking Companies in India: An empirical Research

No doubt, one of the most important policies in corporate financing is the dividend policy. This is not only from the viewpoint of the company, but also from that of the shareholders, the consumers, the workers, the regulatory bodies and the government. The relative importance of this policy stems from the fact that it is a pivotal policy around which other financial policies rotate, hence central to the performance and valuation of firms. A firm’s dividend policy refers to its choice of whether to pay out cash to shareholders, in what fashion, and in what amount. The most obvious and important aspect of this policy is the firm’s decision whether to pay a cash dividend, how large the cash dividend should be, and how frequently it should be distributed. Dividend policy is a pivot around which other financial policies rotate, hence central to the performance and valuation of listed firms. This is more so because managers as decision-makers are often confronted with the “dividend puzzle” - the problem of reconciling observed dividend behaviour with economic incentives. Dividend decision of the firms is considered as one of the important decisions that the firm would make. It must be depend upon what portion of earnings is to be retained by the firm and what portion is to be paid off. There is always an inverse relationship between these two larger intentions such as investment decision and financial decision-making of the firm. Banking Industry shows an impressive growth figures over the recent years. The present paper highlights various dividend policies practice in the corporate world. The paper discusses the various factors which determine the dividend policy of the company and come to the conclusion that academic researchers cannot specify a theoretical optimal dividend policy that simultaneously fits all firms. Because of the complexities involved, it is skeptical that a one-size-fits-all theory of dividend policy will ever gain acceptance. The objectives of the present study are to determine the performance of dividends declaration policies of all the banking companies included in NSE NIFTY, and to estimate the dividend amount allotted to each equity shareholder of the company as well as to determine the mean values of DPS of different banking companies. For this empirical analysis, data has been collected from the share broking sites and selected banking companies’ financial reports. The researchers have taken all the banking companies which are included in NSE NIFTY. The researchers found 8 banking companies viz., ICICI Bank, Punjab National Bank, State Bank of India, Kotak Mahindra Bank, HDFC Bank, AXIS Bank, Indusind Bank and Bank of Baroda. The researchers have taken the data related to Earning Per Share and Dividend Per Share for five years viz., 2010 to 2014. The researchers used various statistical tools such as Mean, Standard Deviation, Coefficient of Variation, and ANOVA. The analysis concludes that banking companies belong to