Shareholder payouts hit a record $1.7 trillion last year as bank profits surged

The underlying figure adjusts for the impact of exchange rates, one-off special dividends and technical factors related to dividend calendars, along with changes to the index.

The banking sector contributed almost half of the world’s total dividend growth, delivering record payouts as high interest rates boosted lenders’ margins, the report found.

Last year, major banks including JPMorgan Chase, Wells Fargo and Morgan Stanley announced plans to raise their quarterly dividends after clearing the Federal Reserve’s annual stress test, which dictates how much capital banks can return to shareholders.

“In addition, lingering post-pandemic catch-up effects meant payouts were fully restored, most notably at HSBC,” Janus Henderson’s report added.

“Emerging market banks made a particularly strong contribution to the increase, though those in China did not participate in the banking-sector’s dividend boom.”

However, the positive impact from banking dividends was “almost entirely offset by cuts from the mining sector,” according to Janus Henderson.

The report noted that large dividend cuts by some major companies such as BHP, Petrobras, Rio Tinto, Intel and AT&T diluted the global underlying growth rate for the year by two percentage points, masking significant broad-based growth in many parts of the world.

Around 86% of listed companies around the world either increased dividends or maintained them at current levels in 2023, Janus Henderson said.

A total of 22 countries, including the U.S., France, Germany, Italy, Canada, Mexico and Indonesia, saw record payouts last year.

Europe was described as a “key engine of growth,” with payouts rising 10.4% year-on-year on an underlying basis.

For 2024, Janus Henderson expects total dividends to hit $1.72 trillion, equivalent to underlying growth of 5%.

— CNBC’s Hugh Son contributed to this report.