Dividend Capacity of Commercial Banks for 2079/80

Dividend Capacity

Dividend Capacity is the percentage of profit that a company can distribute to its shareholders. Investors can make an investment decision by analyzing the dividend capacity of a particular company. Dividend capacity varies as the performance of the company varies in different periods. Here, in this article, we have presented the dividend capacity of (A Class Banks) commercial banks in Nepal for the fiscal year 2079/80.

Dividend Capacity of Commercial Banks for Fiscal Year 2079/80

The following dividend capacity of commercial banks are based on the unaudited financial report of the 79/80 4th quarter report.

Dividend Capacity of Commercial Banks for Fiscal Year 2078/79

BankSymbolDividend Capacity
Everest BankEBL43.67%
Nabil BankNABIL39.94%
NIC Asia BankNICA33.26%
Standard CharteredSCB30.87%
Agriculture Dev. BankADBL29.63%
Nepal BankNBL24.74%
Himalayan BankHBL20.62%
Siddhartha BankSBL16.82%
Nepal SBI BankSBI14.74%
Sunrise BankSRBL14.46%
Global IME GBIME13.45%
Machhapuchhre BankMBL13.25%
Nepal Credit & CommerceNCCB13.23%
NMB BankNMB13.03%
Sanima BankSANIMA12.98%
Prime Commercial BankPCBL12.81%
Kumari BankKBL12.66%
Prabhu BankPRVU12.43%
Bank of KathmanduBOKL12.25%
Mega BankMEGA11.44%
Citizen BankCZBIL11.24%
Nepal InvestmentNIBL11.13%
Civil BankCBL11.09%
Laxmi BankLBL10.87%
Century BankCCBL9.54%

How to calculate dividend capacity?

The dividend Capacity of the banks and financial institutions can be calculated by dividing the distributable profit by the total number of shares. The Distributable profit is the profit after tax and the number of shares is the total outstanding share. The distributable profit amount and total outstanding share units are given in the financial statement of the company.

The following formula is used to calculate the dividend capacity.

dividend capacity formula

If there is a share premium then we have to add share premium % to the dividend capacity to get the total dividend capacity. Let’s calculate the dividend capacity of Everest Bank Limited for the year 2078/79. We have clearly explained the dividend capacity calculation in the case of share premium ratio to share capital.

Dividend Capacity Calculation

Which Bank Has Highest Dividend Capacity?

According the the financial report published for the period of FY 78/79, Everest Bank has highest dividend capacity with 43.67% followed by Nabil Bank 39.94%. This based on the unaudited Quarterly Financial Report Published by the Company. Century Bank has the lowest dividend capacity with 9.54%. 8 Banks has above the average dividend capacity (18.09%) whereas rest of the 18 banks has capacity below industry average.

Dividend Capacity commercial banks
Source – MeroLagani

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