ABSTRACT

There is substantial amount of dividend that is not claimed by shareholders in the

possession of commercial banks in Nigeria. Given that unpaid dividend constitute interest

free source of fund, this study was carried out to examine impact of unclaimed dividend

on performance of commercial banks in Nigeria. To achieve this, three econometric

models were specified for the study. To estimate the models time from the period 2006-

2016 time series data were obtained from the annual reports of commercial banks used for

the study. The data were applied to estimate the models using Ordinary Least Squares

(OLS) simple regression techniques. The estimated models indicated that unclaimed

dividend had significant and positive impact on return on asset, return on equity and

return on investment (proxies for performance). It was suggested that commercial banks

should provide profitability analysis of profit attributable unclaimed dividend, they

should pay interest on unclaimed dividend to the shareholders, provide loan equivalent to

the value of unclaimed dividend at concessionary interest rate to the real sector of the

economy and should finance government budget by using unclaimed dividend to buy

treasury bills/certificates.