Agricultural Development Bank cash dividend plan in limbo

KATHMANDU, JUNE 12:

Nepal Rastra Bank (NRB) has rejected Agriculture Development Bank Ltd (ADBL)’s proposal to distribute dividends. Back in May, ADBL had announced it would distribute 5.6 per cent cash dividend to ordinary shareholders. Likewise, it had decided to distribute six per cent cash dividend to its preference stocks. This was the first time since April 2010, when the largest Nepali bank in terms of paid up capital issued shares to the public, that any dividend was proposed for shareholders. However, NRB did not approve the dividend pay-out of the bank that has non-performing assets higher than 6.2 per cent and credit to deposit ratio of 81 per cent. Moreover, the commercial bank has yet to issue shares to the employees of the bank. Agriculture Development Bank Ltd had earned a net profit of Rs 1.86 billion in the last fiscal year 2011-12, making it the biggest profit earning bank in the last fiscal year from which it was planning to distribute the dividends.

Source: THT