KATHMANDU: All 19 listed commercial banks have made their financial statements public for the last fiscal year, allowing stock investors to estimate potential dividends.
Based on unaudited financial statements, four banks—Nepal Bank Ltd., Kumari Bank, NIC Asia, and Himalayan Bank—are not in a position to pay dividends this year. Nepal Investment Mega, with only a marginally positive dividend capacity, is also likely to withhold dividends.
On average, the dividend payout capacity of the 19 listed commercial banks is 11 percent. Eleven banks have the ability to pay double-digit dividends this year.
Everest Bank leads with the highest dividend payout capacity at 38 percent. The increase in dividend capacity is attributed to banks’ improved debt recovery performance.
However, some banks showing high profits have weak dividend capacity because unearned income is included in profit but cannot be distributed as dividends.
An external audit of the financial statements must be conducted within three months of the fiscal year-end. After the audit, indicators such as adjusted profit and dividend capacity may change.
The bank’s board of directors will then declare dividends to shareholders based on actual capacity through a formal meeting.
Declared dividends can be in cash or bonus shares. Banks hold a general meeting by December end to approve the dividend, which must take place within six months of the fiscal year-end.
Only after approval will investors receive bonus shares in their demat accounts and cash dividends in their bank accounts.
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