KARACHI - The National Investment Trust (NIT) is likely to announce same amount of dividend of Rs3.25 per unit for the holders of its Letter of Comfort (LOC) Fund in the upcoming board meeting which is expected to be held shortly. Financial analysts rule out any major deviation in dividend entitlement of LOC and the non-LOC unit holders and issuance of bonus units as it may cause some cash flow constraints for NBP and Faysal Bank as these banks own sizeable NIT unit portfolios. NBP has invested around PRs1.8bn in the NIT EMOF (Equity Market Opportunity Fund). Any dividend announced by this fund will also impact the bottom-line of NBP positively. It is important to mention here that NIT has already announced a dividend of Rs3.25 per unit for its unit holders for the year ended on June 30, 2009. This payment of dividend totals payout of Rs3.321 billion. NIT has started practicing to treat LOC holder and Non-LOC holders separately. Recently, it has issued a notice to reveal that the meeting for the entitlement of the LOC (Letter of Comfort) holders will be held soon. It also clarified that NIT manages four funds out of which results of only National Investment Unit Trust (NIUT) and NIT State Enterprise Fund were finalised on July 06, 2009 while the results of NIT - LOC Fund and NIT - EMOF would be made public shortly. It is worth noting that the notice sparked ambiguity for the investors clearly evident from the downward movement in the share prices of the NBP and Faysal Bank. According to a research analyst, from April 01, 2007, the authorities decided to split NIT in two broad segments i.e. LOC holders and non-LOC holders primarily due to the privatisation of NIT (which has now been postponed for unidentified time period). Now, interestingly, unit holders of NIT received a consolidated report. However, the allocation of expenses and profits for these two parts are allocated separately. Even auditors conduct separate audit for these two parts. Interestingly, last years NIT dividend announcement of PRs6.5/unit was partially given in bonus to the LOC holders. However, accounting earnings from NIT unit remained unaffected due to this. These banks 'credit the income of NIT units and 'debit cash or CIP (Cumulative Investment Plan) units - the name of the bonus units - which compensated 80pc of the dividend amounts to these banks. Interestingly, these CIPs are Non-LOC units. Consequently, the holdings of NBP, BOP and FABL have been increased but the number of units under LOC remained constant, he said. Analyst further said as LOC holders, these banks cannot redeem their holdings in the market. Nonetheless, as the units received to compensate dividend payout are treated as non-LOC units, banks can easily redeem them. However, during FY09, the banks were unable to do this due to the bearish market performance. The CIP units were issued at a time when NIT units were priced at Rs50. Now, if the market performs better, non-LOC units can easily be redeemed. Nevertheless, this redemption will not have any impact on the accounting earnings of LOC holders. The important point in this scenario is that the banks non-LOC units (allotted during 2008) are entitled to the dividend of Rs3.25/unit, he added.