NIC Asia Bank (NICA) Calls Off Dividend Proposed for FY 2077/78

NIC Asia Bank Limited (NICA) has canceled its dividend proposal for the fiscal year 2077/78.

The company had previously proposed a 15.78947% dividend for the fiscal year 2077/78. The 511th meeting of the board of directors held on Kartik 8 decided to distribute the dividend on the paid-up capital of Rs. 11.56 Arba. 15% bonus shares worth Rs 1.73 Arba and 0.78947% cash dividend (for bonus shares tax purpose) worth Rs 9.12 crore had been proposed.

However, Nepal Rastra Bank ordered the company to call off the proposal citing an insufficient Capital Conservation Buffer. As such, the bank has withdrawn its dividend proposal.

For this reason, the bank has been unable to conduct its AGM. All other commercial banks have convened their respective AGM for the last FY. 

The company reported an increment in Net Profit in the second quarter by 16.57%. The bank's net profit increased from Rs. 2.06 arba in the second quarter of FY 2077/2078 to Rs. 2.40 arba in the second quarter of FY 2078/2079. Nepal Rastra Bank's restriction has now enabled the company to strengthen its reserve, which may have a positive impact for the upcoming years. 

In the second quarter, the bank’s deposit from customers increased by 2.76% to Rs. 2.94 Kharba (compared to the immediate previous year ending) whereas loans and advances to customers increased by 5.29% to Rs. 2.61 Kharba (compared to the immediate previous year ending) till the second quarter. The bank's Net Interest Income (core business income) has increased by 32.81% to Rs. 5.24 Arba compared to the corresponding quarter of the previous year.

The bank’s paid-up capital stands at Rs. 11.56 Arba with Rs. 11.55 Arba in Reserve and surplus. The Non-performing loan (NPL) remained at 0.47%.

The annualized earnings per share (EPS) of the Bank stood at Rs. 41.54 and Net worth per share stood at Rs. 199.89. The company traded at a P/E multiple of 21.19 times.