This dissertation investigates the relationship between dividend payout and firm performance of listed banks in Sri Lanka. The research, conducted by K.K.N. Dilhari, utilizes data from the annual reports of five banks listed on the Colombo Stock Exchange (CSE) from 2008 to 2012. The study employs a correlation research design and regression analysis to examine the impact of dividend payout on firm performance, measured by return on equity (ROE) and return on assets (ROA). The dissertation includes a literature review on dividend policies and firm performance, methodology, data analysis, and conclusions. The findings suggest a significant and positive relationship between firm performance and dividend payout, emphasizing the importance of dividend policy in enhancing shareholder value. The study also identifies key factors influencing this relationship and provides recommendations for financial managers. The dissertation is a valuable resource for understanding the dynamics of dividend policies in the Sri Lankan banking sector.