Laxmi Sunrise Bank Limited has proposed a 5.26 percent dividend for the fiscal year 2082/83, including 5 percent bonus shares and a 0.26 percent cash dividend to cover tax on the bonus shares.
The bank’s 331st Board of Directors meeting, held on October 28, proposed the dividend on its existing paid-up capital, and the bank announced it on October 29 through a disclosure to the Nepal Stock Exchange (NEPSE). The proposal is subject to approval from Nepal Rastra Bank (NRB) and the bank’s upcoming Annual General Meeting (AGM).
The bank’s paid-up capital is about Rs 26.78 billion. The 5 percent bonus amounts to 13,390,581.73 share units, or roughly Rs 1.339 billion in share capital. The cash dividend totals Rs 69,631,025.
What the 5.26 percent means
The 5.26 percent is not a cash return. Under the 5 percent bonus ratio, a shareholder holding 100 shares would receive five additional shares, and one holding 1,000 shares would receive 50. The 0.26 percent cash is meant to meet the tax on the bonus shares. For 1,000 shares at a face value of Rs 100, that is Rs 260 before any applicable withholding or adjustments.
Bonus shares increase the number of shares held but do not automatically raise the total market value of the investment, as the share price is generally adjusted after issue.
Approvals and dates
The bank must obtain NRB approval and then shareholder approval at the AGM before distribution. The AGM date, book closure date, eligibility date, and dates for crediting bonus shares and paying cash have not been announced. The announcement date does not determine eligibility, so investors should wait for the bank’s official notice.
Lower than last year
The proposed dividend is lower than the 10.53 percent reported for FY 2081/82, which comprised 10 percent bonus shares and 0.53 percent cash. For FY 2079/80, the bank reportedly distributed 7.37 percent, made up of 7 percent bonus and 0.37 percent cash.
Financial data from the platform HamroShare shows a net profit of Rs 3.12 billion for FY 2082/83, against Rs 4.12 billion in the previous year, a fall of 24.3 percent. It reports annualised earnings per share of Rs 11.64, down from Rs 16.91, and non-performing loans at 5.23 percent. These figures come from a secondary source and should be checked against the bank’s official Q4 statements.
Background
Laxmi Sunrise Bank, a Class A commercial bank, was formed by the merger of Laxmi Bank, established in 2002, and Sunrise Bank, established in 2007. The two agreed a 1:1 share swap ratio and began joint operations on July 14, 2023.
