Investing in ASX 200 bank shares? Here’s the dividend outlook for 2023

S&P/ASX 200 Index (ASX: XJO) bank shares are all well into the green so far in 2023.

Here’s how the big four bank stocks have performed since the opening bell on 3 January:

ANZ Group Holdings Ltd (ASX: ANZ) shares are up 8.0%.

National Australia Bank Ltd (ASX: NAB) shares have gained 7.9%.

The Westpac Banking Corp (ASX: WBC) share price is up 4.8%.

And Commonwealth Bank of Australia (ASX: CBA) shares have gained 8.5%. The CBA share price is now edging back to retake its November 2021 all-time highs, currently trading for $109.38.

But it’s not just share price growth that attracts many ASX 200 investors to the big bank shares.

Income investors are also drawn by their historically reliable, and relatively juicy, fully franked dividend yields.

What kind of trailing dividends do the big four ASX 200 bank shares pay?

Before looking ahead at what kind of dividends ASX 200 bank share investors might expect in 2023, here are the yields they’ve delivered over the past 12 months, all 100% franked.

Remember, when looking at dividends, most often you’ll see trailing dividend yields reported, as below. Future (or forecast) dividends are based on expected future earnings and may be higher or lower than the trailing yields accordingly.

With that said:

• NAB pays a trailing dividend yield of 4.8%
• CBA pays a trailing dividend yield of 3.6%
• ANZ pays a trailing dividend yield of 5.9%
• Westpac pays a trailing dividend yield of 5.3%

Those are the yields of yesteryear.

Now, what kind of dividend payouts can investors in ASX 200 bank shares expect in 2023?

Broker tips big boost in 2023 dividend payouts

For some insight into that, we defer to the analysts at Morgan Stanley (courtesy of The Australian Financial Review).

All up, the broker expects the big four banks to boost their combined dividends by an average of 9% in 2023.

But some of the ASX 200 bank shares are forecast to reward investors with a bigger dividend lift than others.

According to Morgan Stanley estimates:

• CBA leads the pack, forecast to deliver a 17% year-on-year increase in dividends from $3.85 per share to $4.50 per share
• NAB comes in number two and is forecast to increase its dividends by 10% from $1.51 per share to $1.66.
• Westpac is forecast to boost its dividends by 9% from $1.25 to $1.36 per share.
• ANZ (which pays the highest trailing dividend yield) lags the other ASX 200 banks here and is forecast to increase its dividend payout by 1% from the $1.46 per share paid out last year.

There you have it.

Happy income investing!

The post Investing in ASX 200 bank shares? Here’s the dividend outlook for 2023 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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