BCEL to pay first dividend in March

BCEL to pay first dividend in March

BCEL expects to pay the first dividend to investors in March or April after one year as a public company since listing on the Lao Stock Exchange.

The BCEL headquarters in Vientiane.

BCEL Administration Office Head Mr Khamhou Thongthavy said on Wednesday the bank is now undergoing an external audit, and hopes to complete the financial assessment and announce the result of its 2011 business performance at a shareholder meeting in March or April.

“We will propose that the meeting approves the payment of the dividend,” he told Vientiane Times , adding that the exact amount of the annual dividend will not be announced until the audit has been completed.

The bank could say, however, that the dividend would be higher than the maximum deposit interest rate at BCEL, which now stands at 12 percent annually. The dividend paid is based on the average price of BCEL's IPO at 5,900 kip per share.

The higher return should encourage more people to invest their money in stocks rather than deposit it in a savings account.

Of course, there would be no incentive for people to buy BCEL stock if the return on their investment is less than what they can earn from interest on a savings account, which offers a predictable return and carries a lower risk.

The dividend will be paid out of the bank's profits. The management also plans to pay their staff a bonus and save the remaining profits to fund growth.

In the first six months of 2011, BCEL earned 248 billion kip. After deducting expenses totalling 84 billion kip, a net profit of about 164 billion kip was earned in the first two quarters of the year.

Mr Khamhou said BCEL expected to make a larger profit this year thanks to business growth amid a surging national economy.

One of the bank's major investments in 2011 was a US$71 million loan to Lao Airlines for the purchase of two Airbus 320. The state-owned airline will repay the loan between now and 2019, with annual interest of 6.5 percent.

The government owns 70 percent of BCEL shares, while five percent are owned by company staff, 10 percent are owned by a French bank as a strategic business partner, and the remaining 15 percent belong to Lao shareholders.

The government prohibits foreigners from buying shares in BCEL. However, foreign ownership of EDL Generation shares has recently risen from 10 percent to 20 percent of the total.

vientiane times