Almost half of the commercial banks, which announced benefits for - TopicsExpress



          

Almost half of the commercial banks, which announced benefits for their shareholders from the profit generated in fiscal year 2012/13, have preferred to distribute cash dividend over bonus shares. Out of 22 commercial banks, which have announced benefits and waiting for the nod of their respective annual general meetings (AGMs), 12 have allocated higher percentage of cash dividend compared to bonus shares. Most of the banks that provided cash dividend to its shareholders are those who have a relatively strong capital base, while those banks that are scrambling to meet capital requirement as prescribed by the Nepal Rastra Bank (NRB) have found distribution of bonus shares as the way to increase their capital. Nabil Bank provided the highest benefits (25 percent bonus shares and 40 percent cash dividend) to its shareholders from the net profit it earned in 2012/13. The central regulatory bank has directed commercial banks to maintain minimum paid-up capital of Rs 2 billion by mid-July 2014. Of the 31 commercial banks in the country, Siddartha Bank, NCC Bank, Lumbini Bank, Laxmi Bank, Kumari Bank, Everest Bank and Bank of Kathmandu are yet to meet the capital requirement. NRB spokesperson Bhaskar Mani Gyawali told Republica that the central bank has directed commercial banks to maintain adequate capital. “Banks having low capital base have offered bonus shares to raise their paid-up capital,” he added. Among commercial banks, Machhapuchchhre Bank did not provide any benefit at all. Likewise, KIST Bank is also not in a position to offer return to its shareholders while Nepal Bank Ltd is still under the control of Nepal Rastra Bank (NRB). Century Commercial Bank and Rastriya Banijya Bank could not declare dividend to the public shareholders because of an NRB provision that bars banks from distributing dividend before going public. Kumari Bank, Agricultural Development Bank Ltd, NCC Bank, Commerz and Trust Bank are yet to announce benefits. Source: Republica
Posted on: Mon, 27 Jan 2014 09:22:00 +0000

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