According to a recent report by British asset manager Janus Henderson, global dividend payments to shareholders surged to a historic high of $1.66 trillion in 2023.

Published on Wednesday, the Global Dividend Index report highlighted a 5% year-on-year increase in payouts on an underlying basis, with the fourth quarter witnessing a notable 7.2% uptick compared to the preceding three months.

The underlying figure, which accounts for currency fluctuations, special dividends, and technical factors tied to dividend schedules, alongside index adjustments, provides a clearer picture of the dividend landscape.

The banking sector emerged as a significant contributor to this growth, with nearly half of the world’s total dividend expansion attributed to it.

Record-breaking payouts were fueled by high interest rates that bolstered lenders’ margins, as indicated in the report, CNBC reported.

In the preceding year, major banks such as JPMorgan Chase, Wells Fargo, and Morgan Stanley unveiled plans to elevate their quarterly dividends following successful clearance of the Federal Reserve’s annual stress test.

This test dictates the extent to which banks can distribute capital back to shareholders.

Written by B.C. Begley