Premier Leasing suffers loss of Tk 2.12b in 2022
It declares no dividend for four years
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Premier Leasing & Finance, a third-generation financial institution, suffered a loss of Tk 2.12 billion in 2022, because of its adjustment of provision shortfall since 2015.
The non-bank financial institution is suffering losses for the past three years since 2020 and cumulative losses piling up to Tk 4.93 billion, as per the data available on the Dhaka Stock Exchange.
The company reported a loss of Tk 15.97 per share in 2022 as against loss of Tk 18.18 in 2021, according to a stock exchange filing on Thursday.
Several stock market analysts said the company’s profits have plummeted over the last few years due to irregularities and mismanagement of debt disbursements, even though it was once in a good position.
As a result, the company could not declare any dividends for its shareholders in the last four consecutive years due to losses and provision shortfalls. The company declared a 5 per cent stock dividend last in 2018.
Its stock traded far below the face value and has been stuck at floor at Tk 6.80 since September last year.
High classified loans, negative capital adequacy ratio, excess liabilities and big losses, put Premier Leasing in trouble with doubts about its survival, said the company’s auditor after reviewing its financial report 2021.
The company’s total classified loan stood at Tk 9.38 billion, which was 72 per cent of its total loan at the end of 2021, the auditor found.
The capital adequacy ratio of the company stood at 41.71 per cent negative. This represents the entity’s heavy dependence on liquid assets funded from external sources, and increases the operational risk of the company.
A negative capital adequacy ratio implies the company may not have sufficient capital to handle a certain amount of losses, and exposes the entity to higher insolvency risk, added the auditor.
The financial crisis of the company continued as the company reported a loss of Tk 561 million in January-June of 2023, although slightly decreasing from Tk 718 million loss in the same period in 2021.