Impact of Firm Specific Variables on Dividend Payout of Nepalese Banks

This study examines the impact of firm specific variables on dividend payout of Nepalese banks. For the purpose of this study, the secondary data has been used. The total dividend per share and cash dividend per share are selected as dependent variables. Return on assets, return on equity, earning per share, price earnings ratio, cash flow, total debt to total equity, and size of total assets are independent variables. The data are collected from the Banking and Financial Statistics, Bank Supervision Report published by Nepal Rastra bank and annual reports of selected banks. The regression models are applied to test the significance and importance of dividend payout of commercial and development banks.Using data of 13 commercial banks and 8 national level development bank for the period of 2007/08-2013/14, the result shows that profitability and size are the major determinants of dividend payout of commercial and development banks in Nepal. Earnings per share, return on assets, return on equity, size and liquidity have significant positive impact on dividend per share. Profitability, size and liquidity are found to have positive significant effect on cash dividend per share while leverage has negative effect on cash dividend per share