Agricultural Development Bank to give dividend

KATHMANDU, MAY 06:

Agricultural Development Bank Ltd (ADBL) will be distributing dividends to shareholders for the first time in the last three years since its public offering.

ADBL has announced distribution of 5.6 per cent cash dividend to ordinary shareholders. Likewise, it has decided to distribute six per cent cash dividend to its preference stocks.

The bank, that had issued shares to the public in April 2010, had not been able to distribute any dividend to shareholders despite earning profits due to its retained losses.

“The bank’s board has announced the dividend, however, whether we will be able to actually distribute it or not depends on the central bank’s approval,” said CEO of ADBL Tej Bahadur Budhathoki.

ADBL had earned Rs 1.86 billion as net profit in fiscal year 2011-12, making it the biggest profit earning bank in last fiscal year. It is the largest Nepali bank in terms of paid up capital with a capital of Rs 9.47 billion. It is also second largest company at stock exchange with a market capitalisation exceeding Rs 6.4 billion.

Despite the dividend announcement, ADBL’s shares plunged today by Rs 10. Its shares were traded at Rs 211 by the time the market closed. There are 30.4 million units of ADBL shares listed at Nepse.

Likewise, by the end of the second quarter this fiscal year, the bank had earned Rs 546 million. In the review period, it floated loans worth Rs 43.1 billion and collected deposits worth Rs 44.97 billion, and its net interest payment stood Rs 1.97 billion.

The majority stake of the bank — higher than 51 per cent — is owned by the government which is worth Rs 1.6 billion, while more than 228,000 public shareholders have a stake worth Rs 1.41 billion. The bank, that was established 46 years ago to promote agro lending, was upgraded to a commercial bank in 2006.

Though the bank’s financial health has improved in the last half decade, its non-performing loan is higher than six per cent though its Capital Adequacy Ratio is at 18 per cent — highest among commercial banks. Moreover, ADBL’s second quarter financial report shows its cost of fund to be at 5.5 per cent, and its base rate is fixed at 12.35 per cent.

Among the 28 listed banks at the stock exchange, 22 banks have announced dividends.

Standard Chartered Bank, Nabil Bank and Himalayan Bank were the highest dividend paying banks that distributed 60 per cent dividend including both cash and stock dividend.

Source: THT