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FAS Finance & Investment offers no good news to investors as the non-bank financial institution (NBFI) reported a bigger loss -- Tk 3.19 billion - for 2024, compared to the year before.
The poor performance, however, was no surprise as the company's financial results for the nine months through September last year had the indication.
In the first nine months of 2024, the company incurred a loss of Tk 2.27 billion, up from Tk 2.03 billion in the same period of 2023.
The NBFI, which listed in 2008, has been showing losses since 2018. With each passing year, the business is sinking deeper into the red.
The company has reported a consolidated loss per share of Tk 21.37 for 2024, increased from a loss per share of Tk 19.37 for the year before.
The mounting losses were driven by liquidity crisis, negative cash flow, huge bad loans, and depositors' disinterest in keeping money with the financial institution for lack of confidence and its malpractices.
FAS Finance has almost zero interest income but expenses are significantly high. It even earns a very negligible non-interest income, according to the financial statement for the nine month through September last year.
Recovery of bad loans seems challenging given the overall lax administrative structure.
According to directors' report for 2023, almost all loans had been granted without following the due process and the people behind the malpractice are either absconding or behind bars.
This has made loan recovery more challenging.
The financial institution's net asset value (NAV) was Tk 15.7 billion in the negative in 2023, which escalated further to Tk 18.70 billion in the negative by the end of last year.
When a company's 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.
The irony is that despite the hopeless situation of the company, its stock rose 3.57 per cent to Tk 2.80 per share on Monday over the previous day on the Dhaka Stock Exchange.
Between 2014 and 2017, notorious fraudster Prashanta Kumar, alias "PK" Halder, and his associates siphoned off Tk?1,300-Tk 2,000?crore from FAS Finance via dozens of shell companies, leaving it with a toxic loan portfolio with little prospects of recovery.
By the middle of 2024, a staggering 99.9 per cent of the company's loan portfolio had been classified as defaulted.
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