Most of the listed non-bank financial institutions (NBFIs) witnessed fall in their earnings per share (EPS) in the January-June period of 2022 - compared to the same period of the previous year.
Market analysts attributed the EPS fall to lack of new investment, increased provisioning against non-performing loans (NPLs), and decrease in net income from capital market investment.
Of the 23 NBFIs, listed with the Dhaka Stock Exchange (DSE), 12 disclosed their January-June 2022 EPS so far.
Of these, nine saw fall in their consolidated EPS, while three posted moderate rise compared to the same period of 2021.
EPS is the portion of a company's profit allocated to each outstanding share of common stock. It serves as an indicator of a company's profitability.
Most of the NBFIs could not borrow from the banking sector in line with their demand, and so their EPS dropped (during the period under review), said the managing director of a leading NBFI.
Keeping a large amount of provisioning against NPLs and losses from stock investments also squeezed the NBFIs' profits, he added.
The capital market is a major source of income for the NBFIs, but most of them incurred losses from stock investments due to continuous market fall, said a leading broker.
The DSEX, the DSE prime index, shed 380 points or 5.62 per cent in this January-June. The DSE market-cap lost Tk 245 billion during the period under review.
The consolidated EPS of Bangladesh Finance, IDLC Finance, Islamic Finance, United Finance, LankaBangla Finance, Midas Financing, First Finance, Investment Corporation of Bangladesh (ICB) and Union Capital declined in the January-June period of 2022 compared to the same period a year ago.
Of these, loss of Union Capital and First Finance increased during the period under review, while Midas Financing reduced its loss.
The consolidated EPS of United Finance for January-June 2022 fell 66 per cent to Tk 0.17 - as against Tk 0.50 for January-June 2021.
The consolidated EPS of Bangladesh Finance dropped 30 per cent to Tk 0.78 for January-June 2022 - as against Tk 1.11 for January-June 2021.
"The consolidated EPS decreased for keeping additional interest suspense and providing extra provisions against loan, lease, and investment as a conservative strategy," said the company.
LankaBangla Finance's consolidated EPS for January-June 2022 declined by 18 per cent to Tk 0.58 as against Tk 0.71.
The company informed that the EPS decreased due to fall in net income from its investment in shares.
The consolidated EPS of Islamic Finance dropped 16 per cent to Tk 0.62 as against Tk 0.74 due to decline in earning asset.
ICB's consolidated EPS dropped 41 per cent to Tk 0.28 for January-March 2022 from Tk 0.48 for January-March 2021.
IDLC's consolidated EPS dropped 11 per cent to Tk 2.21 as against Tk 2.49.
"The EPS declined due to decrease in investment income and income from commission, exchange and brokerage respectively as well as decrease in net profit after tax," said the company.
Union Capital's loss increased to Tk 4.64 per cent in January-June 2022 as against loss of Tk 0.84 per share in the same period last year.
The EPS decreased due to decrease in interest income - resulting from increased NPLs and rise in provisioning requirement for increased NPLs, said the company.
First Finance's loss also increased to 4.12 per share in January-June 2022, which was loss of Tk 3.07 per share in the same period last year.
On the other hand, Delta Brac Housing (DBH) Finance Corporation, IPDC Finance, and National Housing Finance and Investment posted modest rise in their EPS year-on-year in January-June 2022. DBH's EPS rose to Tk 2.81 for January-June 2022 as against Tk 2.55 for January-June 2021.
The EPS of IPDC Finance increased to Tk 1.19 as against Tk 1.11.
National Housing Finance's EPS for January-June 2022 rose to Tk 1.32 as against Tk 1.28 for January-June 2021.