NRB rejects Supreme Development Bank dividend

KATHMANDU, MAY 1:

Central bank has rejected Supreme Development Bank’s dividend proposal.

The class ‘B’ financial institution had proposed a cash dividend of 10 per cent and stock dividend of five per cent for shareholders. Nepal Rastra Bank (NRB) has asked the financial institution to retain the amount separated for dividend distribution in its reserve.

The entity, formed after the merger between Annapurna Development Bank and Suryadarshan Finance, had earned Rs 35.7 million as net profit by the end of last fiscal year.

However, since then the merged development bank has not been able to register any profit in the first two quarters of the current fiscal year. The two financial institutions had started operating as a single merged entity since mid-July 2012. In second quarter, Supreme Development Bank (SDB) had recorded a net loss of Rs 52.5 million.

Its non-performing assets stood at 12.53 per cent by that time.

Suryadarshan was doing well before the merger took place and had earned a profit of Rs 6.7 million and its non-performing loans were less than 2.1 per cent. However, Annapurna had been unable to earn any profit since second quarter of last fiscal year and its non-performing assets were higher than 28 per cent. Earlier, NRB had rejected Jyoti Bikas Bank’s proposed cash dividend of 5.263 per cent in December 2012.

Source: THT