@ 2025 | PUBLISHED BY GJR PUBLICATION, INDIA 47 Global Journal of Research in Business Management ISSN: 2583-6218 (Online) Volume 05 | Issue 03 | May-June | 2025 Journal homepage: https://gjrpublication.com/gjrbm/ Research Article Moderating Effect of NPL Ratio on the Relationship Between Short-Term and Total Leverage and Dividend Payout of Listed Deposit Money Banks in Nigeria * Oladosu Tubosun Najim Department of Accounting, Faculty of Management Sciences, University of Abuja, Nigeria. DOI: 10.5281/zenodo.15559037 Submission Date: 20 April 2025 | Published Date: 31 May 2025 *Corresponding author: Oladosu Tubosun Najim Department of Accounting, Faculty of Management Sciences, University of Abuja, Nigeria. 1.1 INTRODUCTION High levels of non-performing loans (NPLs) can significantly hinder the profitability and liquidity of deposit money banks (DMBs). Liquidity risk and leverage are interconnected with the financial performance of Nigerian Deposit Money Banks, suggesting that unfavourable credit circumstances may restrict dividend payments due to diminished retained earnings (Otekunrin et al., 2024). Conversely, capital adequacy directly impacts a bank's return on assets (ROA), underscoring the necessity of sustaining sufficient capital to alleviate risks linked to elevated non-performing loan (NPL) ratios (Adeoti & Akinroluyo, 2022). These indicate a reciprocal enhancement among capital reserves, asset quality, and dividend payment capacity. Leverage, especially in the form of debt, complicates the dividend distribution framework. A high debt-to-equity ratio may indicate stringent constraints set by creditors, thus restricting the available discretionary funds for dividends (Abubakar et al., 2022). Profitability profoundly influences dividend distribution policies, indicating that banks with diminished profitability, frequently attributed to elevated non-performing loans (NPLs), are less inclined to sustain considerable dividend disbursements (Harada & Nguyên, 2011). Short-term leverage can be quantified using several indicators, with the primary objective of most studies being to assess how effectively a company utilises its resources for both long-term and short-term operations. Salihu et al. (2023). Moreover, overall leverage is a significant statistic utilised to denote leverage. The resources of a company may include those derived from capital contributors or short-term instruments such as customer deposits, which can be quantified as a fraction of another report element, such as total assets or equity. Short-term leverage and total leverage ratios may present divergent narratives on a company's financial success at a specific moment. The rationale for these selections is twofold: to understand the impact of client deposits as a short-term obligation on operations, and to assess whether overall debt as a proportion of equity significantly affects financial performance. Salihu et al. (2023). Abstract This study assessed the moderating effect of Non-Performing Loan ratio on the relationship between short-term and total leverage and dividend payout of listed deposit money banks in Nigeria. The population of this study consists of the Thirteen (13) Deposit Money Banks in Nigeria listed on the Nigerian Exchange Group as of 30th April 2025. This study covers the period of ten years between the year (2015-2024). Multiple regression analysis test was used to examine the moderating effect of non-performing loans on the relationship between short-term leverage and total leverage on dividend payment of deposit money banks in Nigeria. The results of this findings revealed a positive relationship between short-term leverage (STL) and dividend payouts, the result of this findings shows total leverage (TL) appears to have no significant direct effect on dividends, the result also revealed that short-term leverage, higher NPLs strengthen the positive relationship with dividend payout and finally, the results of this findings show a negative relationship between total leverage and non-performing loans on dividend payout. The study therefore recommends. Banks should adopt more prudent dividend policies that account for both leverage levels and asset quality. When non-performing loans (NPLs) exceed certain thresholds, management should consider reducing or suspending dividend payments to preserve capital. Keywords: Non-performing loans; Dividend Payout; Short-term leverage; Total leverage.