Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Bay Leasing & Investment's loss surged in 2024 to more than 11 times the amount it had incurred in the first nine months of the year through September, driven by an escalation in provisioning against bad loans.
Compared to 2023, the annual loss, Tk 4.39 billion, in 2024 was 5.3 times higher. The non-bank financial institution (NBFI) announced its financial results for 2024 on Saturday after a meeting of the board of directors.
Shareholders were, however, expecting a better yearly performance as the company had claimed to have made a year-on-year improvement in January-September last year.
According to earlier disclosures, the NBFI reduced its loss by about 24 per cent year-on-year to Tk 359 million in January-September 2024.
The company has reported a consolidated loss per share of Tk 31.16 for 2024, whereas its earnings the year before were Tk 5.88 per share in the negative.
The exact reason for the business's going in reverse could not be known as a detailed financial statement is yet to be published.
But the company's CFO Md. Enayet Kabir told The FE that, "Many of our big customers have been in loss since August 5, 2024 [the day the previous government fell]; some of them have fled the country while some of them suffered because their manufacturing facilities have been set ablaze.
"We are facing a very high NPL (non performing loan) situation. That is why our provisioning jumped and we made a huge loss in 2024."
In 2023, provision was Tk 291 million; the total loss amounted to Tk 828 million with operating loss.
It had an operating loss in 2024 too, meaning the company has consistently been paying more interest than earned. The company was also unable to offset interest loss through income from investments.
In the first nine months of 2024, operating loss was Tk 265 million, which means provision in the year may have surpassed Tk 3.0 billion.
The financial institution's net asset value slipped into the red for the first time in 2024.
In 2023, the net asset value was Tk 847 million, which became Tk 3,550 million in the negative by the end of 2024.
"We are expecting some recovery at the end of this year [2025]. We will be able to recover more than Tk 1.5 billion," said the company's CFO.
When a company's net asset value (NAV) becomes negative, it means that its total liabilities have exceeded the value of its assets. In simple terms, the company owes more than it owns, indicating serious financial distress.
Bay Leasing & Investment, once considered a relatively stable organisation in the financial sector, has been struggling for poor risk management practices, inadequate loan recovery mechanisms, limited business diversification etc, the factors that weakened its balance sheet.
The annual general meeting (AGM) will be held on August 28. The record date is July 21.
Meanwhile, the stock rose 2.5 per cent to Tk 4.1 per share on the Dhaka Stock Exchange on Thursday over the previous day.
farhan.fardaus@gmail.com