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
| Bank | Symbol | Dividend Capacity |
|---|---|---|
| Everest Bank | EBL | 43.67% |
| Nabil Bank | NABIL | 39.94% |
| NIC Asia Bank | NICA | 33.26% |
| Standard Chartered | SCB | 30.87% |
| Agriculture Dev. Bank | ADBL | 29.63% |
| Nepal Bank | NBL | 24.74% |
| Himalayan Bank | HBL | 20.62% |
| Siddhartha Bank | SBL | 16.82% |
| Nepal SBI Bank | SBI | 14.74% |
| Sunrise Bank | SRBL | 14.46% |
| Global IME | GBIME | 13.45% |
| Machhapuchhre Bank | MBL | 13.25% |
| Nepal Credit & Commerce | NCCB | 13.23% |
| NMB Bank | NMB | 13.03% |
| Sanima Bank | SANIMA | 12.98% |
| Prime Commercial Bank | PCBL | 12.81% |
| Kumari Bank | KBL | 12.66% |
| Prabhu Bank | PRVU | 12.43% |
| Bank of Kathmandu | BOKL | 12.25% |
| Mega Bank | MEGA | 11.44% |
| Citizen Bank | CZBIL | 11.24% |
| Nepal Investment | NIBL | 11.13% |
| Civil Bank | CBL | 11.09% |
| Laxmi Bank | LBL | 10.87% |
| Century Bank | CCBL | 9.54% |
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.
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.
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.
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