Green Development Bank announces dividend
27th November 2025, Kathmandu
Green Development Bank has officially announced its dividend proposal for the fiscal year 2024/25, which will be distributed to its shareholders from the bank’s accumulated profit.
Green Development Bank Dividend
The decision was formalized during a meeting of the bank’s Board of Directors held on Wednesday, setting a total dividend rate that must now pass through regulatory and shareholder approval processes.
Dividend Proposal Summary and Capital Context
The proposed dividend structure is designed to balance the interests of the shareholders with the development bank’s strategic need to strengthen its equity base, a common practice in the Nepalese banking sector.
Total Proposed Dividend: The bank has decided to distribute a total dividend of 8.46274 percent. This rate represents the combined value of both the stock dividend and the small cash component necessary to cover tax liabilities.
Basis of Calculation: The entire dividend percentage is calculated against the bank’s existing paid-up capital, which currently stands at 569 million 698 thousand 500 rupees.
The proposed distribution is strategically divided into two components:
Bonus Shares: The bank has proposed distributing 8.0396 percent as bonus shares (a stock dividend). This means that for every 100 shares held by an investor, the bank will issue approximately 8.04 new shares. The main benefit of bonus shares for the bank is the preservation of its liquid cash reserves, while the shareholder receives additional equity.
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Cash Dividend for Tax: A small portion, 0.42314 percent, is proposed as a cash dividend. This minimal cash amount is specifically earmarked and allocated to cover the mandatory tax required on the bonus shares, ensuring that the shareholder receives the full face value of the bonus shares without being burdened by the tax payment themselves.
Regulatory and Financial Strategy
The dividend announcement is a key indicator of Green Development Bank’s profitability for the fiscal year 2024/25. The distribution plan reflects both its commitment to rewarding investors and its strategic compliance with central bank mandates.
Capital Enhancement: The significant 8.0396 percent portion dedicated to bonus shares is strategically important for the bank. When these shares are issued, they will directly and permanently increase Green Development Bank’s paid-up capital by a corresponding amount transferred from its retained earnings or reserves. This increase strengthens the bank’s Capital Adequacy Ratio (CAR), which is crucial for meeting the minimum capital requirements and prudential norms set by Nepal Rastra Bank (NRB). A stronger capital base allows the bank to safely increase its lending portfolio and support greater economic activity within its operating regions.
Mandatory Approval Process: The proposed dividend is legally binding only after it completes a two-step mandatory approval process.
Nepal Rastra Bank Scrutiny: As a licensed Class B development bank, the bank must first secure approval from the central bank. NRB thoroughly reviews the financial proposal to ensure that the bank has sufficient reserves and that the distribution will not compromise its financial stability or regulatory standing.
Shareholder Ratification: The proposal must then be submitted to the bank’s shareholders for final endorsement at the upcoming Annual General Meeting (AGM). Only after this ratification can the bank proceed to announce the book closure date and initiate the actual distribution of the dividend to all eligible shareholders.
Role of Green Development Bank in the Economy
As a development bank, Green Development Bank plays a specialized and critical role in Nepal’s financial architecture, distinct from commercial banks. These institutions are vital for achieving targeted financial inclusion and economic growth, particularly in regional and rural areas. They focus on channeling credit to priority sectors such as small and medium enterprises (SMEs), agriculture, and infrastructure projects within their operating scope. The bank’s ability to maintain a consistent dividend payout through a period of economic fluctuation demonstrates its underlying stability and effectiveness in managing its loan portfolio and profitability, which is a positive sign for the local economy it serves.
For More: Green Development Bank Dividend
