Dividend patterns of commercial banks and its effect on stock price (with special reference of selected commercial banks)

Abstract

This study examines the dividend patterns of commercial banks and its effect on stock price.Agriculture Development Bank Limited (ADBL), Nabil Bank Limited (NABIL), Nepal Investment Bank Limited (NIBL), Mega Bank Limited (MBL) and Sunrise Bank Limited (SBL) are the selected commercial banks. The study has identified earning per share (EPS) of last year, dividend per share (DPS) of last year, and growth in assets (GA) as independent variables whereas; market price of share (MPS) is a dependent variable. The data are collected from annual reports of selected commercial banks. The survey is based on eight different fiscal year period from FY 2013/14 to FY 2020/21 AD.

The results show that dividend per share (DPS) has the highest positive significant impact on market share price of the commercial banks. There is significant but negligible positive impact of growth in assets (GA) on market share price of the commercial banks. Earnings per share (EPS) have the positive and significant impact on the market share price of the commercial banks.