Most NBFIs post fall in nine-month EPS

FE Online Report | Published: November 02, 2018 11:23:18 | Updated: November 04, 2018 11:22:04

The earnings of most of the non-bank financial institutions (NBFIs) fell in the nine months to September last compared to that of the corresponding period of last year.

According to the un-audited financial statements for the January-September period, 2018, the consolidated earnings per share (EPS) of 17 NBFIs out of 23 declined, according to statistics from the Dhaka Stock Exchange (DSE).

EPS is the portion of a company's profit allocated to each share. In short, it serves as an indicator of a company's profitability.

Market insiders said lack of new investments, thanks to a liquidity shortage, cast a gloom over the NBFIs during the period.

"Most of the financial institutions could not borrow from the banking sector as per their demand and hence the decline in their earning per share," said a managing director of a leading non-bank financial institution, seeking anonymity.

The huge amounts of provisioning due to non-performing loans and losses from capital market investments, he said, ate into the profits of the NBFIs.

The capital market was a major source of income for the financial institutions. But almost all the NBFIs incurred losses from stock investments due to the market fall, said a leading broker.

DSEX, the prime index of the DSE, plunged 876 points, or 14 per cent in the January-September period of the year.

In the January-September period, EPS of Premier Leasing declined most, by 93 per cent year-on-year, to Tk 0.04.

LankaBangla Finance's EPS also fell 88 per cent to Tk 0.26 in January-September period of 2018 followed by Midas Financing with 80 per cent fall to Tk 0.24.

EPS of Bay Leasing, Bangladesh Finance & Investment, Bangladesh Industrial Finance Corporation, Fareast Finance, FAS Finance, First Finance, GSP Finance, ICB, IDLC Finance, Islamic Finance, National Housing Finance, Phoenix Finance, Peoples Leasing and Prime Finance also declined.

LankaBangla Finance posted negative earnings per share in the third quarter of 2018 after suffering huge losses in its operation in the capital market.

The company's consolidated EPS was Tk 0.24 in the negative for the July-September period, down from Tk 0.90 in the same quarter of the previous year.

The company had to set aside a huge amount for provisioning against losses, which pushed the EPS down, said an official of the LankaBangla Finance.

On the other hand, Delta Brac Housing Finance Corporation, IPDC Finance, Union Capital, United Finance, Uttara Finance and International Leasing & Financial Services saw their EPS rise in the January-September period.

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