Dividend Decisions Finalized by 19 Commercial Banks, 6 to Skip Payouts
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5th January 2026, Kathmandu
In a significant update for the Nepalese capital market 19 out of the 20 commercial banks operating in Nepal have finalized their dividend decisions for the previous fiscal year 2079 80. While the majority of the sector has moved forward with its annual corporate actions the results have been mixed for the investing public.
Commercial Banks Dividend Decisions
Specifically six commercial banks have decided not to distribute any dividends to their shareholders this year reflecting a cautious approach toward capital management. Currently NIC Asia Bank remains the sole institution that has yet to announce its dividend proposal for the year. This period of dividend announcements is closely monitored as it serves as a primary indicator of the financial health and profitability of the banking industry in Nepal.
SIX COMMERCIAL BANKS TO SKIP DIVIDEND PAYOUTS
Among the 20 commercial banks six have officially decided to retain their earnings rather than providing returns to their investors. This group includes the state owned Rastriya Banijya Bank which is not listed on the stock exchange and five prominent listed banks: Kumari Bank Nepal Bank Prabhu Bank Nepal Investment Mega Bank and Himalayan Bank. Notably these five listed banks have failed to provide any dividends to their shareholders for three consecutive fiscal years starting from FY 2078 79. This trend has raised concerns among retail investors as it suggests prolonged challenges regarding asset quality capital adequacy and the need for heavy provisioning against potential loan losses in a tightening regulatory environment.
DIVIDEND PERFORMANCE OF THE REMAINING 13 BANKS
In contrast to those skipping payouts 13 commercial banks have moved forward with dividend approvals. Out of these 10 banks have already concluded their Annual General Meetings. Machhapuchchhre Bank was the first to lead the way by holding its AGM on Ashoj 10 and approving an 8 percent total dividend. The remaining three banks are scheduled to hold their meetings later this month. NMB Bank has proposed a 10 percent dividend Nabil Bank has proposed a 12.50 percent payout and Prime Commercial Bank has set a proposal for an 8.42 percent dividend. For Prime Commercial Bank shareholders registered up to Poush 20 are eligible for the payout following the book closure on Poush 21.
EVEREST BANK LEADS THE SECTOR WITH 20 PERCENT DIVIDEND
Everest Bank Limited has emerged as the top performer in terms of shareholder returns this year. The bank announced and distributed the highest dividend in the commercial banking sector totaling 20 percent. This payout consisted of a 6 percent bonus share and a 14 percent cash dividend inclusive of taxes. Everest Bank has successfully managed to increase its payout compared to the previous fiscal year a feat supported by its improved financial performance and robust earnings growth. This announcement has been a major highlight for the market positioning the bank as a highly stable and investor friendly institution amidst a period of economic uncertainty.
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MARKET IMPLICATIONS AND INVESTOR SENTIMENT
The stark divergence in dividend decisions across the sector highlights an uneven recovery within Nepal’s banking industry. While top tier banks like Everest Bank Nabil Bank and NMB Bank continue to reward their investors others are prioritized for capital preservation and regulatory compliance. For the average investor in the Nepal Stock Exchange dividend income is a crucial component of total portfolio returns. The repeated absence of dividends from nearly a quarter of the commercial banks has dampened investor sentiment leading to a more critical evaluation of bank stocks based on their ability to generate distributable profits rather than just total asset growth.
REASONS BEHIND THE DIVIDEND DROUGHT
Several factors contribute to the decision of six banks to skip dividends. The primary reason is the pressure on the Capital Adequacy Ratio which measures a bank’s available capital expressed as a percentage of its risk weighted credit exposure. Additionally many banks are facing increased Non Performing Loan ratios due to the current economic slowdown which necessitates higher loan loss provisioning. When a bank’s profit is diverted toward these provisions the amount of distributable profit shrinks. Furthermore the Nepal Rastra Bank has implemented stricter regulatory norms that require banks to maintain higher capital buffers to ensure the long term stability of the financial system.
THE WAIT FOR NIC ASIA BANK’S PROPOSAL
As the market watches the conclusion of the dividend season all eyes are now on NIC Asia Bank. Being the only bank left to announce its proposal its decision is highly anticipated. Market participants are curious to see if the bank will align with the high performing group like Everest Bank or if it will adopt a more conservative stance similar to Himalayan Bank or Nepal Investment Mega Bank. NIC Asia has historically been an aggressive player in the market and its dividend decision will likely have a significant impact on the trading volume and price movement of its shares in the secondary market.
CONCLUSION AND FUTURE OUTLOOK FOR BANKING INVESTORS
In conclusion the dividend landscape for the fiscal year 2079/80 provides a clear picture of the varying financial strengths within Nepal’s banking sector. While 13 banks have managed to provide returns the decision by six others to skip dividends for three years underscores deep structural challenges. For investors the key takeaway is the importance of fundamental analysis focusing on banks with strong capital bases and low NPL ratios. As the final AGMs conclude the industry will shift its focus toward the performance of the current fiscal year.
For More: Commercial Banks Dividend Decisions
