ADBL AGM on May 23; stock remains undervalued despite huge returns

ShareSansar, April 25:

Agricultural Development Bank Limited (ADBL) has announced its seventh Annual General Meeting on May 23.

The AGM to be held at the Army Officers Club in Kathmandu will formally endorse 31.58 percent cash dividend to the ordinary share holders and 6 percent cash dividend for the preferential shares, according to the AGM notice published today.

The annual event will also appoint senior chartered account Tirtha Raj Upadhyay as the bank’s auditor for the current fiscal year 2070/71.

The 482nd BoD meeting of the state-run commercial bank had offered the dividend in February.

This is the highest cash dividend pledged by any state-run bank and second highest by commercial bank in the country for the last fiscal year, following 50 percent cash dividend offered by Everest Bank Limited.

ADBL remains the most undervalued stock in the market despite the fact that it is the highest income and profit earner among all the commercial banks in the country, and its net profit is steadily increasing over the recent years.

The ADBL scrip was last traded on Wednesday for just Rs 484.

According to those keeping a close tab on the bank say that the price defies logic, and believe that the general suspicion regarding the state-own banks could be the major factor behind the undervalue of the scrip.

Moreover, the government has already decided to divest its 30% stake in the bank and bring in foreign strategic partners to improve the management and performance of the bank.

While the government is currently evaluating the price of its shares to be sold, the bank management is actively engaged in the process to attract foreign partners through global tender, according to sources and share investors, privy of the development.

The state-run bank with one of the largest client base and branches has officially initiated the process to forger international strategic partnership for better management and performance of the bank.

As part of its objective to forge the strategic partnership by September, ADBL in January struck a deal Dev Associates within a day or two for the special audit of the bank.

Dev Associates, Chartered Accountants has been appointed as an independent member firm of Baker Tilly International with effect from October 2011. As per the deal, Dev Associates and Baker Tilly Nepal are jointly representing as Baker Tilly International member firms in Nepal.

It may also be noted that the bank has come up with impressive quarterly reports this fiscal year, and is expected to offer much better dividend for the current fiscal.