Directions for Improving the Dividend Policy of Commercial Banks

Abstract

The thesis examines the role of dividend policy in the financial management of commercial banks and identifies ways to improve it in the context of Uzbekistan's banking sector transformation. Drawing on agency, signalling and regulatory-constraint theories and on the recent dividend practice of Uzbek joint-stock banks, the author argues that a bank's dividend policy should be formulated as a multi-year, capital-anchored rule rather than as an annual residual decision. Five directions for improvement are proposed: linking payouts to capital adequacy and stress-test buffers, adopting target payout corridors, introducing interim dividends and share buy-backs, strengthening disclosure of dividend policy, and aligning dividend practice with the privatisation and IPO agenda of state-owned banks.