NMB Bank Limited has completed the sale of 3 crore non-redeemable, non-listed preference shares valued at NPR 3 billion. The Securities Board of Nepal (SEBON) had approved the sale exclusively to institutional investors through the 8.25% circular method on Poush 9, 2081 B.S. The bank’s board of directors ratified the allotment decision during a meeting held on Magh 13. Siddhartha Capital served as the issue and sales manager for this transaction.
The bank follows a policy of distributing dividends only in years when it generates distributable profits. Under this framework, ordinary shareholders are entitled to a maximum dividend of 35%, while preference shareholders receive a fixed dividend rate of 8.25%. Since the preference shares are set to be listed on the secondary market, institutional investors can trade them after listing. Dividend distribution to ordinary shareholders occurs after fulfilling the fixed dividend obligation to preference shareholders.
Historically, NMB Bank’s ordinary shareholders have received dividends higher than the fixed rate for preference shares. For example, in the fiscal year 2078/79, ordinary shareholders received dividends equivalent to those of preference shareholders. Over the past decade, the highest dividend of 35% was distributed in fiscal year 2075/76. From last year’s profits, the bank’s annual general meeting held on Poush 24 approved a total dividend of 10%, comprising a 5% cash dividend and 5% bonus shares.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
