14th October 2025, Kathmandu
In a major development for the Nepali financial sector, Garima Bikas Bank Limited (GBBL) has officially announced a total dividend of 10.53% for its shareholders for the fiscal year 2023/24.
Garima Bank Announces Dividend
This proposal, stemming from the bank’s commendable performance and accumulated profits, solidifies GBBL’s position as a reliable institution committed to providing consistent returns to its investors. This comprehensive article delves into the details of the dividend, the financial backbone supporting this decision, and what it signals for the bank’s future trajectory.
Understanding the 10.53% Dividend Breakdown
The dividend proposal was formally announced following a decision by the bank’s Board of Directors. The total 10.53% dividend is carefully structured to balance capital growth with immediate returns for shareholders:
Bonus Shares: The bank has proposed distributing a substantial 6% in bonus shares. This is a crucial element for shareholders, as it increases their total number of shares, thereby enhancing the paid-up capital of the bank. Following the issuance of this bonus, the bank’s paid-up capital, which stood at Rs. 5.68 Arba at the end of the fiscal year, is expected to grow to approximately Rs. 6.02 Arba. This injection of bonus shares strengthens the bank’s capital base, positioning it for future expansion and risk absorption.
Cash Dividend: Accompanying the bonus shares is a 4.53% cash dividend. It is important to note that this cash portion includes the tax liability on the proposed bonus shares, ensuring shareholders receive a net cash benefit along with their newly issued shares.
The announcement of any corporate action, especially dividends, is a multi-step process. This proposal is currently pending final approval from the central regulatory body, the Nepal Rastra Bank (NRB). Once approved by the NRB, the dividend will be formally endorsed during the bank’s upcoming 19th Annual General Meeting (AGM), after which it will be distributed to eligible shareholders.
The Financial Engine Behind the Robust Payout
The decision to offer a dividend rate of 10.53% is a direct reflection of Garima Bikas Bank’s exceptional financial performance throughout the fiscal year 2081/82. A look at the bank’s unaudited fourth-quarter financial report reveals the metrics that powered this decision, painting a picture of sharp profitability growth and prudent management.
Surge in Profitability and Key Ratios
Garima Bikas Bank demonstrated remarkable financial strength, particularly towards the close of the fiscal year. The bank reported a massive surge in its Net Profit, which increased by over 200% compared to the previous fiscal year, reaching an impressive figure of approximately Rs. 1.31 Arba. This tremendous growth was largely driven by a notable improvement in the bank’s operational efficiency and a sharp fall in impairment charges for loans and advances.
This exceptional growth translated directly into a significant improvement in shareholder-focused metrics. The bank’s Annualized Earnings Per Share (EPS) stood at an impressive Rs. 23.07 at the close of Q4 FY 2081/82. This EPS figure positioned GBBL at the top of the list when compared to its peers within the development bank category, underscoring its superior earnings generation capacity. Furthermore, the bank’s market valuation remains attractive, as evidenced by one of the lowest Price-to-Earnings (P/E) ratios within the development banking sector, reported at 18.57 times.
Asset Quality and Capital Strength
Maintaining asset quality and capital adequacy is paramount for any financial institution. GBBL showed positive trends in these areas as well:
Non-Performing Loan (NPL) Ratio: The NPL ratio saw a marginal decline, landing at 4.72%. While this figure indicates continued vigilance is required in loan management, the containment of the ratio in a challenging economic climate is a positive sign.
Capital Adequacy Ratio (CAR): The CAR, a key measure of the bank’s financial stability, stood at 13.47%. This is comfortably above the regulatory minimum set by the Nepal Rastra Bank, assuring stakeholders of the bank’s ability to absorb potential losses and continue expansion.
Balance Sheet Growth: The bank’s core business metrics also demonstrated healthy expansion. Deposits grew by nearly 7% to reach over Rs. 90 Arba, and loans and advances increased by over 7% to approximately Rs. 69.32 Arba, reflecting sustained growth in both funding and lending activities.
Contextualizing GBBL’s Dividend in the Development Banking Sector
Garima Bikas Bank’s 10.53% dividend proposal places it among the highly competitive players in the Nepalese development banking industry. While a 10.53% total return is considered solid, especially given the current economic landscape, its composition—heavy on bonus shares—highlights a strategic focus on bolstering the bank’s capital structure for longer-term stability and growth.
When compared to other national-level development banks, GBBL’s underlying financial performance, specifically its industry-leading EPS of Rs. 23.07, indicates that the dividend is well-supported by robust current-year earnings. This strong profitability suggests a solid capacity for future dividend payouts, a key factor for long-term investors.
The bank’s strategic decision to prioritize a 6% bonus share component over the cash dividend portion is a commonly observed move among rapidly growing financial institutions in Nepal. This strategy allows the bank to retain a larger portion of its accumulated profits, which can then be reinvested into expanding its branch network, upgrading technology, and strengthening the overall balance sheet, all while rewarding shareholders with increased equity.
Investor Perspective and Future Outlook
For investors, the 10.53% dividend announcement is a strong signal of management’s confidence and the bank’s fundamental resilience. The blend of bonus and cash offers a dual benefit: immediate liquidity from the cash portion and long-term capital appreciation potential from the bonus shares.
Garima Bikas Bank has a history of consistently rewarding its shareholders, a track record that fosters investor trust. As a prominent national-level development bank operating across Nepal with a wide network, GBBL is well-positioned to capitalize on economic recovery and increasing financial inclusion across the country. The high EPS and low P/E ratio, coupled with a well-capitalized base, make GBBL a compelling stock for investors seeking value and growth within the development banking segment.
The implementation of the dividend is now subject to the final nod from the regulatory authorities, a standard procedure that ensures compliance and stability across the banking system. Shareholders are now eagerly awaiting the official book closure date, which will determine eligibility for this rewarding distribution.
The 10.53% dividend proposal from Garima Bikas Bank is more than just a figure; it is a testament to its operational excellence and strategic foresight in a dynamic market. The significant increase in net profit and the highest EPS among peers solidify the bank’s standing as a sector leader in profitability and efficiency. This announcement not only rewards loyal shareholders but also sets a confident tone for the bank’s performance in the upcoming fiscal year.
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