Last day to clinch 31.58% cash dividend of undervalued ADBL scrip

ShareSansar, April 30:

Today is the last day to ensure 31.58 percent cash dividend offered by Agricultural Development Bank Limited (ADBL) to the ordinary share holders from the profit it posted in the last fiscal year 2069/70.

ADBL, which has been posting the highest income and profit among the commercial banks over the past few years, has announced the book closure from May 2 for its Annual General Meeting slated for May 23.

Since today is the last trading day for the month of April and that Nepal Stock Exchange Limited will remain closed tomorrow for May 1 Day, today is the last trading for the much undervalued scrip before the book closure.

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.

Despite such a huge returns, the price of ADBL scrip hovers just around Rs 470.

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.