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IPDC Finance has reported a 98.8 per cent year-on-year surge in profit to Tk 37 million for the first quarter through March this year, supported by high returns from investments in government securities.
Investment income saw a sharp 134.8 per cent year-on-year surge to Tk 239 million as earnings from government securities soared 208.8 per cent to Tk 125 million in the quarter to March this year compared to the same quarter last year.
Despite the seemingly high income growth, the earnings per share went up to only Tk 0.09 for the quarter through March.
IPDC, one of the most compliant non-bank financial institutions (NBFIs), had a consistent growth in earnings until 2022. But when the government removed the lending rate cap in June 2023, the NBFI started facing intense competition with banks to attract depositors.
It started offering higher rates than banks to depositors but failed to increase lending rate much, narrowing the interest margin.
The yearly profit fell to Tk 343 million in 2023 from Tk 901 million the year before. In 2024, there was a marginal increase in profit to Tk 363 million. The year proved to be tougher for NBFIs to remain on the growth trajectory, with many witnessing losses.
The net operating cash flow per share (NOCFPS) rebounded to Tk 4.86 in Q1 this year from Tk 12.39 in the negative a year ago. Net Asset Value (NAV) per share inched up to Tk 17.83 for Q1 this year.
"We are delighted with our first-quarter results, which demonstrate the resilience of our diversified business model," said Rizwan Dawood Shams, managing director of IPDC Finance in a press release issued on Wednesday.
Through a balance of risk-adjusted investments and prudent cost control, we've achieved strong profitability amid subdued credit demand. We remain dedicated to serving our customers and contributing to Bangladesh's economic progress," he added.
Meanwhile, the stock fell 1.92 per cent to Tk 15.30 per share on Wednesday on the Dhaka Stock Exchange.
Currently, the company's price-to-earnings ratio is 16.45, significantly higher than the sectoral ratio of 10.33 and the overall market's ratio of 9.42, according to amarstock.com.
The PE ratio means a company's current stock price relative to its latest earnings per share.
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