Kathmandu: The Insurance Board has approved the proposed dividend of Nepal Life Insurance Company Limited(NLIC). The company had submitted the proposal to distribute 14 percent bonus shares from the profits of the previous fiscal year 2076/77 and 0.73 percent cash dividend for tax purposes on the bonus shares.
With the Board approving the dividend, now NLIC can take the agenda to the upcoming AGM.T he company had earned a net profit of Rs 1.14 billion on fiscal year 2076/77. The company will distribute a total of Rs 1.61 billion from the same profit.
The company has given priority to bonus shares this year as well as last year. At present, the paid up capital of Nepal Life is Rs. 7.19 billion. After the proposed bonus share, it will reach Rs 8.20 billion.
For fiscal year 2075/76, NLIC had distributed 50 percent dividend including 25 percent bonus share.
Even though the Insurance Board has fixed the minimum paid-up capital of life insurance companies at Rs 2 billion, Nepal Life has Rs 7.19 billion.
The appetite for large size of paid capital is highly expected as the level of risk is too is high for NLIC due to its large market share. With the larger size of paid up capital, it would be easier for the NLIC management to manage its capital structure as prescribed by the recently introduced risk-based capital model by the Insurance Board.