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DBH Finance secured a "moderate" 2.4 per cent year-on-year increase in profit to Tk 1,008 million in 2024, a year marked by economic and political upheavals, having kept non-performing loans (NPLs) remarkably low.
"Our growth is not bad in consideration of the overall situation," said Managing Director of DBH Finance Nasimul Baten.
NPLs remain below 1 per cent of total loans disbursed by the non-bank financial institution (NBFI) at a time when a significant number of its peers and banks are struggling to survive with high amounts of defaulted loans. The industry average of such loans is more than 35 per cent.
Loans given by DBH Finance so far amount to Tk 150 billion including Tk 11.05 billion disbursed in 2024.
The company's loan book could have been expanded more if the inflation were at a tolerable level and in that case earnings would have been higher, said Mr Baten.
DBH Finance's performance has remained consistent since its inception in 1996 when it comes to limiting defaults, he said. The company's prudence in loan disbursement against housing projects, including apartments and residential group projects, helped maintain a low level of NPLs.
Apart from scrutinising projects, the company examines the repayment ability of clients before providing loans, according to the MD.
Interest rates against loans have risen to 13-13.5 per cent because of the overall increase in interest rates in the money market.
High interest rates coupled with inflation are discouraging people from borrowing, which is why the number of clients has not increased as expected, according to the company.
The company has released its financial results for the first quarter through March this year along with annual statements for 2024.
The Q1 performance seems to have suffered a big dent as the EPS declined by more than 10 per cent year-on-year to Tk 0.78 for January-March this year, compared to the corresponding period last year.
In its financial statements, the company has not mentioned the reason behind the decline.
In the meantime, DBH Finance has shifted its focus from the capital city to divisional headquarters as real estate companies have already started operations there witnessing business potential.
It has so far opened 16 branches outside Dhaka.
With the moderate annual profit growth, the board of directors of DBH Finance has recommended 15 per cent cash and 2 per cent stock dividends for the year ended in December last year.
The stock dividend has been decided in order to utilise retained earnings as paid-up capital for improving the capital adequacy and thereby facilitating the future business expansion of the company.
Bonus shares will not be given from capital reserve or revaluation reserve or any unrealised gain so that post-dividend retained earnings remain positive, said the company.
The company's EPS (earnings per share) stood at Tk 5.07 in 2024 against Tk 4.95 the year before.
The net operating cash flow was Tk 75 million in the negative in 2024 because of a significant rise in cash outflows, primarily due to an increase in loans and advances.
However, the cash flow turned positive in the first quarter through March of 2025. DBH Finance has reported a net operating cash flow per share (NOCFPS) of Tk 5.72 for January-March this year while it was Tk 1.86 in the negative for the same quarter of the previous year.
An increase in customer deposits by Tk 1.36 billion along with receipts from other operating activities totaling Tk 221.6 million helped the cash flow turn positive during the quarter to March.
As of December last year, DBH Finance maintained a strong capital adequacy ratio (CAR) of 30.46 per cent and secured a 11.15 per cent return on equity (ROE), calculated by dividing net income by shareholders' equity, for 2024.
The stock of A' category company DBH Finance experienced correction on the bourses over the last four months.
It closed at Tk 41.60 per share on November 20 last year. Later, the price gradually declined and finally closed at Tk 34.80 per share on Tuesday on the Dhaka bourse.
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