Will Rastriya Beema Company “shower” its shareholders with returns? Massive dividends inflow from NIBL and NABIL

The dividend announcement of various companies for the FY 2074/75 has been going on currently. Most of the companies have been announcing dividends on the basis of their earnings and their future plans.

Recently, Nepal Investment Bank Limited (NIBL) has announced 40% dividend for the FY 2074/75 which includes 18% bonus shares and 22% cash dividend. Similarly, Nabil bank had announced 34% dividend including 12% bonus shares and 22% cash dividend.

If we have a look at the annual report of both the companies, the name of one company is found in the top shareholders’ list i.e. Rastriya Beema Company Limited (RBCL).

The company holds 12.42% shares in NIBL while it holds 9.67% shares in Nabil Bank.

Considering the data of the annual report for the FY 2073/74, its holding is worth Rs 1,14,80,32,000 in NIBL and its holding is worth Rs 59,81,80,100 in Nabil Bank. After adjusting the bonus shares for the Fy 2073/74 of both the banks (15% for NIBL and 30% for Nabil) the investment in NIBL amounts to Rs 1,32,02,36,800 and investment in Nabil Bank amounts to Rs 77,76,34,130.

The non-life insurance company holds such a huge portion of share of both the banks which makes it eligible for huge return as well.

Adjusting the currently announced cash dividend of both the banks, the non-life insurance company will receive Rs 29.04 crore from NIBL and Rs 17.10 crore from Nabil Bank as cash dividend. The company will earn Rs 46.14 crore as cash dividend from two companies.

The paid-up capital of RBCL as per the Q1 report stands at Rs 26.66 crore which makes the EPS (only from cash dividend of these two banks) to stand at Rs 173.06.

The AGM of the insurance company is pending since 2068/69. The company had reported net profit of Rs 55.09 crore in the fourth quarter of the FY 2074/75.

The massive dividend from the two banks greatly increase the earnings of the insurance company. Added that with its own earnings, the bank will have a huge disposal of distributable profit in its hand. So, it is safe to assume that the shareholders of RBCL are up for a treat in the coming days.