Traders work on the floor at the New York Stock Exchange in New York City, US, March 5, 2024.
Brendan McDiarmid | Reuters
LONDON – Global dividends 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, published on Wednesday, said payouts rose 5% year-on-year on an underlying basis, with the fourth quarter showing a 7.2% rise from the previous three months.
The base figure is adjusted for the impact of exchange rates, one-time special dividends and technical factors related to dividend calendars, along with changes in the index.
The report found that the banking sector contributed nearly half of the world's total earnings growth, achieving record payouts as higher interest rates boosted lenders' margins.
Last year, major banks, including JPMorgan Chase, Wells Fargo and Morgan Stanley, announced plans to increase their quarterly dividends after passing the Federal Reserve's annual stress test, which determines how much capital banks can return to shareholders.
“In addition, prolonged post-pandemic catch-up effects will mean that payments will be fully recovered, most notably in… HSBCJanus Henderson added a report.
Emerging market banks made a particularly strong contribution to this increase, although banks in China did not share in the banking sector profit boom.
However, the positive impact from bank profits was “almost completely offset by cuts in the mining sector,” according to Janus Henderson.
The report indicated significant reductions in the profits of some major companies, such as: BHP, Petrobras, Rio Tinto, Intel Corporation And AT&T This year's underlying global growth rate has eased by 2 percentage points, masking significant broad-based growth in many parts of the world.
“Main driver of growth”
Janus Henderson said that about 86% of listed companies around the world either increased dividends or maintained them at their current levels in 2023.
A total of 22 countries, including the United States, France, Germany, Italy, Canada, Mexico and Indonesia, saw record payouts last year.
Europe was described as a “key driver of growth”, with payments rising 10.4% year-on-year on an underlying basis.
For 2024, Janus Henderson expects total earnings to reach $1.72 trillion, equivalent to 5% underlying growth.
CNBC's Heo Soon contributed to this report.
