Global corporate dividends: Corporate dividends worldwide surged to a historic high of $1.66 trillion in 2023, with remarkable contributions from banks accounting for half of the growth, according to a report released on Wednesday.

The quarterly Janus Henderson Global Dividend Index (JHGDI) revealed that 86% of listed companies globally either increased or maintained dividends, projecting a new record of $1.72 trillion in payouts for the current year.

Microsoft emerged as the top dividend payer in 2023, followed by Apple and Exxon Mobil.

Underlying growth, which considers currency fluctuations, special dividends, and timing changes, stood at 5 per cent compared to 2022, noted UK asset manager Janus Henderson.

"Corporate cash flow across various sectors remained robust, fueling dividends and share buybacks," said Ben Lofthouse, head of global equity income at Janus Henderson.

The banking sector witnessed record dividend payments of $220 billion in 2023, marking a 15% increase from the previous year, driven by higher interest rates and a rebound after pandemic-induced freezes.

However, the mining sector saw notable dividend cuts from prominent companies like BHP, Rio Tinto, Petrobras, Intel, and AT&T, which offset some of the banking sector gains.

Geographically, Europe (excluding the UK) contributed majorly to global dividend growth, with payouts rising by 10.4% to $300.7 billion. 

Japan also made a notable contribution despite a weak yen.

While the United States remained the largest contributor to global dividend growth, its 5.1% growth rate aligned with the global average.

Emerging markets dividends remained flat, with steep cuts in Brazil and sluggish growth in China.

Looking ahead, Janus Henderson forecasts another 5 per cent growth in corporate dividends for the current year, with expectations that the rapid increase in bank dividends will slow down, while declines from the mining sector might have a lesser impact.

(With Reuters Inputs)