Rewards for Resilience: Four Development Banks Announce Strong Dividends for FY 2024/25
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2nd November 2025, Kathmandu
The Nepali stock market is buzzing with positive news as the Annual General Meeting (AGM) season commences, highlighting the solid financial performance of the nation’s development banks. As of 1st November 2025 (15 Kartik 2082), four key development banks listed on the Nepal Stock Exchange (NEPSE) have publicly declared their dividend proposals for the Fiscal Year 2024/25.
Announcement of Strong Dividends
These declarations, offering a diverse mix of cash and bonus shares, underscore the sector’s resilience and its commitment to providing attractive returns to its valued shareholders, even amidst a challenging macroeconomic landscape.
Muktinath Leads the Pack with Highest Payout
Among the first batch of announcements, Muktinath Development Bank stands out, offering the most substantial total dividend. The bank has proposed a generous payout of 18.2%. This high-return strategy heavily favors capital appreciation for the shareholder, with the dividend structured as:
Bonus Shares: A significant portion, amounting to 13.53%, will be issued as bonus shares. This move increases the bank’s paid-up capital and increases the number of shares held by the investor, essentially reinvesting the bank’s profit back into the shareholder’s portfolio.
Cash Dividend: The remaining 4.67% is designated as a cash dividend. This component is primarily designed to cover the tax liability that the shareholder incurs on the bonus shares, ensuring that the capital gain is received without an immediate out-of-pocket tax payment.
The bank’s AGM was held on 15 Kartik, indicating swift action to ratify the dividend and move toward distribution, reflecting confidence in its financial position and future growth prospects. Muktinath Development Bank’s willingness to offer such a high bonus share component is often interpreted by investors as a signal of its ambition for continued growth and potential future strategic upgrades within the banking structure.
Kamana Sewa and Garima: Balanced Bonus-Cash Mix
Following Muktinath, both Kamana Sewa Development Bank and Garima Development Bank have offered substantial and well-balanced dividends, ensuring shareholders benefit from both immediate cash flow and capital appreciation.
Kamana Sewa Development Bank announced a total dividend of 15.7895%. This robust figure is allocated as:
Bonus Shares: 10% will be distributed as bonus shares, solidifying the bank’s capital base.
Cash Dividend: 5.7895% will be distributed as cash. Notably, Kamana Sewa’s cash portion is the highest among the four listed banks, indicating a strong emphasis on providing immediate liquidity and tax coverage to its shareholders. The bank’s AGM for this dividend has already been successfully concluded, streamlining the path for distribution.
Garima Development Bank has declared a total dividend of 10.53%. The allocation is structured as:
Bonus Shares: 6% will be given out as bonus shares.
Cash Dividend: 4.53% will be paid as cash, which includes the amount allocated for tax purposes on the bonus shares.
Garima Development Bank has scheduled its AGM for 27 Kartik at the Hotel Pokhara Grand. Shareholders must ensure their ownership is recorded by the book closure date of 18 Kartik to be eligible for both the dividend and participation in the AGM. The more modest bonus component from Garima suggests a cautious, balanced approach to capital management while still providing an attractive return above the general market rates.
Miteri’s Cash-Only Strategy and Shareholder Eligibility
Miteri Development Bank takes a distinctive approach compared to its peers, opting for a cash-only dividend for the fiscal year 2081/82.
Total Dividend: Miteri is distributing a 10% total dividend, entirely in cash. This strategy appeals directly to investors prioritizing immediate liquidity and fixed, predictable income over long-term capital appreciation via bonus shares. A cash-only dividend simplifies the process for shareholders and reduces the compliance and listing burden associated with bonus shares.
Miteri Development Bank will hold its AGM on 6 Mangsir at the Sunsari Chamber of Commerce in Dharan. The bank has announced a book closure period from 23 Kartik to 6 Mangsir. This is a critical period for investors; only those shareholders whose names are registered in the company’s records up to 22 Kartik will be eligible to receive the declared 10% cash dividend and attend the AGM.
The Significance of Dividends in the Development Bank Sector
These dividend announcements collectively demonstrate the continued stability and profitability of the “B” class financial institutions in Nepal. Development banks often play a crucial role in providing financial services outside of major metropolitan areas, supporting small and medium enterprises (SMEs) and localized infrastructure projects. Their ability to deliver attractive returns, particularly the high bonus share offerings from Muktinath and Kamana Sewa, signals strong reserves, retained earnings, and adherence to the Nepal Rastra Bank’s (NRB) capital adequacy norms. For investors, these dividends are not just a measure of past performance but also a forward-looking indicator of management confidence and the expectation of sustained revenue generation in the coming fiscal year. The diverse dividend structures—from Muktinath’s bonus-heavy proposal to Miteri’s cash-centric return—offer shareholders choices based on their investment goals, whether it be capital growth or immediate income.
For More: Announcement of Strong Dividends
