Bankers Loggerhead on Stock or Cash Dividend

Oct 31, 2023 01:15 PM Merolagani

Till date, seven commercial banks have announced dividends while dividend announcement of 12 commercial banks are still pending.

The banks which have not announced dividend have accelerated meetings with directors to make a final call. As per sources, the bankers are at loggerheads regarding stock or cash dividends rather than how much of dividend to distribute.

The sources reveal that their dispute is about whether to distribute cash only or stock only dividend. Moreover, few of the bankers are up for both cash and stock dividend.

Apparently, banks that have huge paid-up capital maintained after merger/acquisition are prioritizing cash dividend. However, directors of banks like Global IME and Nabil are favorable to both cash and stock dividend. Meanwhile, banks with low paid-up capital are distributing stock dividend.

Currently, there are 20 commercial banks including government owned Rastriya Banijya Bank which has not issued shares to the public are operating in Nepal. Out of them, seven banks including Standard Chartered Bank, Siddhartha Bank, NIC Asia Bank, Everest Bank, Machhapuchchre Bank, Sanima and Citizens Banks have already announced dividend.

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