When will the remaining commercial banks offer dividend and how much?

ShareSansar, January 26:

Of the total 31 commercial banks in the country, 22 of them have already announced dividends from the net profit they registered in the last fiscal year 2069/70.

It is but natural for the shareholders and other stakeholders to ask what about the remaining nine banks?

Though the expected dividend of all these nine commercial banks cannot be ascertained as of now owing to various reasons including the pending decision of their BoD regarding the dividend, one can still easily deduce that the dividends are not possible from five of them.

The state-run Nepal Bank Limited and Rastriya  Banijya Bank as well as public-private commercial bank Kist Bank Limited are simply in no position to offer any dividend while Machhapuchchhre and Century have already held their AGM without offering any dividend.

That brings us to four commercial banks that are expected to offer dividend: Kumari Bank, Nepal Credit and Commerce (NCC) Bank, Commerz and Trust Bank Nepal Limited, and the state-run Agricultural Development Bank Limited (ADBL).

If the pressure the management of ADBL and Kumari are facing from the stakeholders, including the shareholders, trade unionists, other staffer as well as ordinary shareholders, is anything to go by, ADBL is expected to offer around 30 percent dividend while Kumari might propose 35 percent.

It may be noted here that during ADBL’s anniversary held earlier this month, its top executives had said that they were working toward providing a composite dividend to the shareholders for the past five years.

ADBL’s AGM held in July last year failed to deliver 5.26 percent cash dividend for the shareholders and 6 percent for preference shareholders announced earlier by the  bank  from the net profit it had posted in the previous fiscal year after the central bank did not approve of the dividend mainly due to the bank’s failure to convert Rs 16.25 crore issued capital to paid-up capital.

Nonetheless, ADBL had gone on to post a massive net profit of Rs 1.86 arba in the last fiscal year 2069/70.

Although the operating profit of the bank was negative, ADBL was able to post a net profit of Rs 1.86 arba due to a huge chunk of write back from the provisioning for possible losses.

The bank’s fourth quarterly report of the last fiscal shows that the write back amounted to Rs 2.17 billion. The bank had posted a net profit of Rs 1.57 billion during the previous fiscal year.

Dividend being hinted by the sources at the Kumari Bank,  however, seem somewhat high considering its track record.

The commercial bank had posted just 5.82 percent growth in profit for the FY 2069/70. The bank made profits of Rs 29.15 crore, a slight growth over Rs 27.55 crore reported last year.
 
Now we come to the remaining two banks – Commerz and Trust and NCC, they should be proposing impressive dividends, considering their very impressive performance in the last fiscal year.

Commerz and Trust had posted a net profit of Rs.5.86 crore in the last fiscal, up from 1.51 crore in the previous fiscal. Similarly, NCC had posted a net profit of Rs 37.08 crore, up from 17.76 crore.

Insofar as the AGMs of these nine banks are concerned, three of them have already held their annual event for the last fiscal while the remaining six are yet to fix their date.

Rastriya Banijya Bank had held its AGM back in July last year, Century Commercial Bank held in December, while Machhapuchchhre Bank held its AGM only on January 13.

None of the remaining commercial banks could suggest exact or tentative date for the AGM at this juncture.