Sunday, May 5, 2013

Agricultural Development Bank to give dividend for the first time

Agricultural Development Bank Ltd (ADBL) is distributing dividends to shareholders for the first time in the last three years since its public offering.
The bank has announced distribution of 5.6 per cent cash dividend to ordinary shareholders. Likewise, it has also decided to distribute six per cent cash dividend to its preference stocks, subject to the approval from the central bank. Though the bank’s financial health has improved in the last half decade, its non-performing loan (NPL) is higher than six per cent though its Capital Adequacy Ratio (CAR) is at 18 per cent — highest among commercial banks. Moreover, ADBL’s second quarter financial report shows its cost of fund to be at 5.5 per cent, and its base rate is fixed at 12.35 per cent, the highest among the commercial banks.
Likewise, by the end of the second quarter this fiscal year, the bank had earned Rs 546 million. In the review period, it floated loans worth Rs 43.1 billion and collected deposits worth Rs 44.97 billion, and its net interest payment stood Rs 1.97 billion.

ADBL had earned Rs 1.86 billion as net profit in fiscal year 2011-12, making it the biggest profit earning bank in the last fiscal year. It is also the largest domestic bank in terms of paid up capital with a capital of Rs 9.47 billion. It is also the second largest company at the stock exchange with a market capitalisation exceeding Rs 6.4 billion.
The bank, that had issued shares to the public in April 2010, had not been able to distribute any dividend to shareholders despite earning profits due to its retained losses.
However, ADBL’s shares today were traded at Rs 211 per unit. There are 30.4 million units of ADBL shares listed at Nepse.
The majority stake of the bank — higher than 51 per cent — is owned by the government which is worth Rs 1.6 billion, while more than 228,000 public shareholders have a stake worth Rs 1.41 billion. The bank, that was established 46 years ago to promote agro lending, was upgraded to a commercial bank in 2006.

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