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Earnings of most NBFIs plummet in Jan-Sept

Losses from capital market, huge default loans blamed


Babul Barman | Published: November 05, 2019 11:13:03 | Updated: November 07, 2019 10:38:46


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Earnings of most of the listed non-bank financial institutions (NBFIs) plunged in the first nine months of the year due mainly to huge provisioning against default loans and losses from capital market.

EPS (earning per share) is the portion of a company's profit allocated to each outstanding share of common stock. In short, it serves as an indicator of a company's profitability.

Some 13 of the 22 NBFIs saw their EPS plummeted between the months of January and September, according to un-audited financial statement.

The People's Leasing & Financial Services (PLFS) did not declare earnings as the company under liquidation process in line with government's decision due to deterioration of its financial health in the last several years.

The EPS of Bangladesh Finance, BIFC, Fareast Finance, FAS Finance, First Finance, GSP Finance, ICB, IDLC Finance, International Leasing, Midas Financing, Phoenix Finance, Union Capital and United Finance saw their EPS fall in January-September, 2019, according to Dhaka Stock Exchange data.

Fareast Finance and First Finance fell more in losses in January-September period while EPS of Midas Financing and Union Capital turned negative afresh during the period under review, the DSE data shows.

The EPS of ICB witnessed the highest loss of 85 per cent to Tk 0.86 for the year ended on June 30, 2019 compared to the last year as the company's year ended on June 30.

The state-run company noted that EPS has been decreased due to decline in capital profit and increase in loan interest.

The EPS of International Leasing Finance also lost 81 per cent to Tk 0.11 in January-September period of 2019.

FAS Finance's EPS also dropped 57 per cent to Tk 0.15 in January-September, 2019.

On the other hand, EPS of Bay Leasing, Delta Brac Housing Finance, IPDC, Islamic Finance, LankaBangla Finance, National Housing Finance, Premier Leasing, Prime Finance, and Uttara Finance saw their EPS rise than that of the last year.

Premier Leasing saw the highest EPS rise of 125 per cent year-on-year to Tk 0.09 in January-September, 2019, followed by LankaBangla Finance with 100 per cent increase to Tk 0.52, IPDC 50 per cent to Tk 1.52 in January-September, 2019.

Market analysts said lack of new investments, thanks to a liquidity crisis, cast a gloom over the non-bank financial institutions sector during the period under review.

"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 NBFI, seeking anonymity.

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

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

The DSEX has lost a cumulative 1,238 points or 21 per cent in the past nine months since January 24, when the index peaked at 5,950.

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