NCC likely to offer bonus shares from projected profit of 2070/71 FY, too

ShareSansar, March 30:

Nepal Credit and Commerce Bank Limited will most probably offer 15 to 18 percent bonus shares to the shareholders from the profit it posted in the last fiscal year and additional bonus shares from the projected profit of the current fiscal year to meet the paid-up capital requirement of Rs 2 arba by the end of the current fiscal year 2070/71.

The bonus share from the projected profit of the current fiscal will, however, not be endorsed by the upcoming Annual General Meeting for the last fiscal year, but by the next AGM for the current fiscal year, according to a highly placed source at the bank told ShareSansar.

He further said that since the bank is simply not in a position to give more than 18 percent dividend from the net profit it posted in the last fiscal year 2069/70, and that it has decided not to issue right shares, the bank is requesting the central bank to allow it to give bonus share from the projected profit of the current fiscal.

“Though a merger is another option to meet the paid-up requirement, it will take months before we can finalize a deal. Hence, we are currently thinking about offering bonus shares from the projected profit of the current fiscal year,” the source explained.

If his statement is anything to go by, NCC will most probably pledge 18 percent bonus share from the net profit it posted in the last fiscal so that its paid-up will rise to Rs 173 crore, and additional 15 percent bonus share from the project profit for current fiscal, which will then shore up the paid-up to Rs 2 arba.

Or it can issue lesser bonus shares for the last fiscal and more for the current fiscal.

The source further informed that the bank has already submitted a preliminary audit report to the central bank in this regard, and that the central bank could endorse it as there is a provision of distributing dividend from the projected profit.

"We will propose the bonus shares after the central bank approves our preliminary balance sheet," the source said.

The source also informed that they were planning to hold the Annual General Meeting in Jestha since they do not have sufficient time to call the annual event in Baisakh.

NCC is the only commercial bank that is yet to announce dividend and the AGM for the last fiscal year.

The crisis-ridden bank, whose management has been taken over by the central bank after NCC’s financial health deteriorated owing to strife between two promoter groups, one associated with NB Group and the other close to Nirmal Pradhan, a big shareholder.

In February, the central bank had suspended the NCC Board of Directors and set up a three-member management team led by NRB Director Laxmi Prapanna Niraula and Deputy Director Ramesh Acharya and Assistant Director Resham Raj Regmi as its members.