In the last FY, 26 commercial banks that have announced dividend of the last FY have logged an average dividend yield of 6.04 percent compared to 4.55 percent of the previous FY. The average dividend yield increased by 1.41 percent in the last FY compared to the corresponding period of the previous FY.
The dividend yield has been calculated on the basis of the last traded price (LTP) on the date of book close for their respective AGMs.
The dividend yield increased due to increase in profit of commercial banks backed by increased paid-up capital, said Dr Yatma Ram Ghimire, former Chairman of Nepal Investors Forum. ‘Capital increases profit as the raised capital helps to expand investment,” said Ghimire. He added ‘Commercial banks are aggressively expanding their investment which has ultimately shown result in the forms of profit. The bank interest rate and spread rate also helped to increased profit of the commercial banks. In the last FY, the interest rate was high which increased their income while the spread rate was tight.”
Out of the total commercial banks listed in NEPSE, only 26 have announced dividend of the last FY. Among them, some have already endorsed and distributed the dividend, while few are yet to conduct AGM. Similarly, Century Commercial Bank has not announced the dividend while Nepal Credit and Commerce Bank and Himalayan Bank have not declared book close date for AGMs.
In the period, investors of NMB Bank (NMB) have earned the maximum return of 35 percent. The bank logged the highest yield of 8.71 percent during the period. The last traded price of the stock before book close was Rs 402 which is the base price for the calculation of dividend yield. Those investors who invested below Rs 402 earned high return in the stock.
The dividend yield of Nepal Credit and Commerce Bank and Himalayan Bank have been calculated based on the price of January 8.
Nabil Bank with the highest stock price has logged dividend yield of 4.53 percent. Meanwhile, Standard Chartered Bank has the lowest dividend yield of 4.05 percent.
The dividend yield is the ratio of a company's annual dividend compared to its share price.
Standard Chartered distributed highest dividend in five years
Standard Chartered Bank has distributed the highest rate of dividend in the last five FYs. The bank distributed an average of 44.91 percent dividend from FY 2071/72 to 2075/76. The bank distributed an average stock dividend of 52.78 percent and cash dividend of 13.24 percent during the five years period.
Similarly, Civil Bank distributed the lowest dividend in the last five FYs. The bank distributed an average of 6.31 percent dividend during the last five years period.
