“Current issues and Practices of Finance”

A Seminar Paper on
“Dividend policy and firm’s performance with reference to
Citizens Bank International Limited”

Submitted by:
Raju Danai
Kathmandu Don Bosco College
MBA 4th Sem
 Introduction

A portion of the profit that is paid out to the

shareholders, is known as dividend.

Could be either Cash or Stock.

Dividends are generally defined as the distribution
of earnings in real assets among the shareholders of
the firm in proportion of their ownership (Thapa
and Basnet, 2014).
 Objective of the Study

• To determine the relationship between firm

performance and dividend policy.
• To examine the impact of dividend policy on
the firm’s performance.
• To ascertain the significant relationship
between dividend policy and firms
profitability.
 Methodology of the Study

Population: Commercial banks listed by NEPSE.

Sample: Citizens Bank International Limited.
Source of data: Secondary Source
Tools/instruments
Statistical tools: Mean, Standard deviation, correlation.
Financial tools: EPS, DPS, ROA, ROE.
 PRESENTATION AND
ANALYSIS

EPS
Year EPS (RS) % change in EPS

19.66 -
2012/2013
23.7 20.54
2013/2014
30.94 30.54
2014/2015
35.25 13.93
2015/2016
20.27 (42.49)
2016/2017
Average 25.96
 Dividend Payout Ratio

year Stock Dividend (%) Cash Dividend (%) Dividend Payout Ratio (%)

2012/2013 15 15 76.29

2013/2014 18.95 5.95 25.1

2014/2015 21.05 1.05 3.73

2015/2016 25.78 1.29 3.66

2016/2017 17 1 6.4
 Market/Book Ratio
Market/Book Ratio
Year Market Value (RS) Book Value (RS)
2012/2013 267 113 2.36
2013/2014 539 116 4.65
2014/2015 489 121 4.04
2015/2016 680 121 5.62
2016/2017 403 136 2.96
Average
Market/Bo 3.93
ok Ratio - -
Return on Assets
Year ROA (%)
2012/2013 1.79
2013/2014 1.71
2014/2015 1.95
2015/2016 2.24
2016/2017 1.8
Average ROA 1.90
Return on Equity (ROE)
Year ROE (%)
2012/2013 17.37
2013/2014 18.09
2014/2015 19.2
2015/2016 20.36
2016/2017 11.52
Average ROE 17.308
 Descriptive Statistics

N Minimum Mean Std. Deviation

EPS 5 19.66 25.9640 6.86072

Dividend Payout ratio 5 3.66 23.0360 31.08519

ROA 5 1.71 1.8980 .20993

ROE 5 11.52 17.3080 3.42822

Market/Book Ratio 5 2.36 3.9260 1.30310

 Correlation Co-efficient

EPS Dividend Payout Ratio ROA ROE

EPS 1

Dividend Payout Ratio -0.6115 1

0.88508
ROA 9 -0.46507 1

0.72864
ROE 5 0.013002 0.540406 1
 Findings
• Dividend Policy has an impact on the firm's performance.

• There is a negative relationship between EPS and

dividend policy. And ROA and dividend policy.

• There is a positive relationship between ROE and

dividend policy.

• CBZL pays less cash dividend; investment opportunities.

 Conclusion
EPS, market/Book Ratio, ROA and ROE calculated on
the basis of annual report of CZBL.

The results of the study reveal that dividend policy of

the firm has significant impact on performance.

it can be concluded that the market price per share

and earnings per share are affected by dividend
decisions.
Thank YOU!