Banks Accelerate Dividend Distribution, Most Commercial Banks Cut Payouts

Kathmandu — Banks and financial institutions have begun distributing dividends to shareholders from the profits earned in the last fiscal year, with many commercial banks either approving or announcing dividend payouts. While several banks have already secured approval from their annual general meetings, others are yet to declare dividends.

So far, 13 out of 20 commercial banks have announced dividends. In addition, eight development banks have also declared dividend payouts. However, compared to the previous year, dividend rates of most commercial banks have declined, reflecting pressure on profitability.

Under regulatory provisions, banks are required to distribute a portion of their profits earned through deposit mobilization, lending, and other financial services to shareholders in the form of dividends. Among the banks that have announced dividends so far, Everest Bank has offered the highest payout, while Citizens Bank has announced the lowest. Kumari Bank has decided not to distribute any dividend this year.

Dividend details of major commercial banks

Everest Bank
Everest Bank has announced the highest dividend so far, amounting to 20 percent. The bank has already approved a total dividend of 6 percent bonus shares and 14 percent cash dividend from its profit for fiscal year 2021/22.

Standard Chartered Bank
Standard Chartered Bank has decided to distribute a 19 percent cash dividend from its distributable profit of the last fiscal year. The proposal has already been approved by the bank’s annual general meeting.

Agricultural Development Bank
Agricultural Development Bank has announced a total dividend of 13 percent, comprising 3.25 percent bonus shares and 9.75 percent cash dividend. The proposal is yet to be approved by the annual general meeting.

Siddhartha Bank
Siddhartha Bank has approved a total dividend of 10.53 percent, consisting of 5 percent bonus shares and 5.53 percent cash dividend from its paid-up capital.

NMB Bank
NMB Bank has announced a 10 percent dividend, with an equal split of 5 percent bonus shares and 5 percent cash dividend (including tax).

Laxmi Sunrise Bank
Laxmi Sunrise Bank has declared a total dividend of 10.53 percent, including 10 percent bonus shares and 0.53 percent cash dividend. The bank has called its annual general meeting on January 15 to approve the proposal.

Nepal SBI Bank
Nepal SBI Bank has announced a total dividend of 9 percent, comprising 4 percent bonus shares and 5 percent cash dividend for tax purposes.

Machhapuchchhre Bank
Machhapuchchhre Bank has already approved an 8 percent dividend, including 4 percent bonus shares and 4 percent cash dividend, at its annual general meeting held on October 1.

Global IME Bank
Global IME Bank has approved an 8 percent cash dividend with no bonus shares at its annual general meeting held on November 12.

Sanima Bank
Sanima Bank has approved a 7.37 percent cash dividend, opting not to issue bonus shares this year.

Citizens Bank International
Citizens Bank International has approved a total dividend of 5.26 percent, consisting of 5 percent bonus shares and 0.26 percent cash dividend.

Bankers and analysts attribute the overall decline in dividend payouts to slower credit growth, rising non-performing loans, and tighter regulatory requirements, which have collectively put pressure on bank earnings during the past fiscal year.