The declaration of dividend by National Investment Trust is a bonanza for several listed banks holding large chunk of units, generating income of as much as Rs 890 million.
NIT, the largest state-run mutual fund, declared a dividend of Rs 2.55 per unit for the year ended June 30, 2004, highest ever in any year during the entire life of 42 years.
According to estimates, banks such as Faysal Bank Ltd, National Bank Ltd, and Bank of Punjab would be one of the beneficiaries of the dividends besides individual unit holders.
The Bank of Punjab has about 150 million units of NIT, National Bank of Pakistan 367 million units and Faysal Bank 157 million units.
After deducting the element of tax, the net income through dividend generated by the Bank of Punjab worked out to be 365.5 million rupees, National Bank 890.80 million rupees and 381 million rupees by Faysal Bank.
HEALTHY GROWTH: This hefty dividend from NIT to boost the earnings of the banks in the six months ended June 30 and would help to earn more through dividend income of other listed companies as the ongoing year recorded healthy growth.
Tariq Iqbal Khan, chairman, NIT on Saturday said that the management would, through efficient and cost cutting measures, would be on target and would improve the earnings during the current fiscal year.
He also said that in a bid to make NIT unit more competitive and to address the long-outstanding demand of investors, the board of directors also decided to reduce the total load (spread) from the existing 4.5 percent to 3.5 percent.
The savings of one percent at the end of the fiscal year would be transferred to its unit holders, he added.
Khan said that the net income of the fund (excluding unrealised gains) increased significantly by 42 percent to the record high amount of Rs 4.233 billion against Rs 2.981 billion earned during the last financial year of 2002-03.
He said that the Trust has also increased its stock market operation to a great extent during the previous three years.
The Trust traded record high shares of worth Rs 12.296 billion during the year under review.
"The enhanced activity also provided needed support to stock market," he said and added as a result of its increased trading activities and active participation in the stock market, capital gains realised during this period amounted to Rs 1.939 billion that are ever highest during the last eight years and are remarkably higher by 99.5 percent compared to Rs 972 million of the last year.