Bangladesh
3 days ago

Premier Leasing's loss hits Tk 12b over five years

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Premier Leasing & Finance has posted a massive annual loss of Tk 3.66 billion for the year 2024, driven by a negative net interest margin stemming from a large volume of non-performing loans.

According to company disclosures, the troubled non-bank financial institution's accumulated losses have now reached Tk 12 billion over the five-year period from 2020 to 2024. The company attributed the sustained losses to "substantial provisions" made against high default loans.

The board of directors of the company approved the audited financial statements for 2024 on Thursday. Due to the staggering losses, the board did not declare any dividend.

Premier Leasing has been trapped into a high volume of classified loans, negative capital adequacy ratio and excess liabilities. As a result, the company is suffering losses for the past five consecutive years.

Premier Leasing was listed on the stock exchanges in 2005. Until 2018, the company was doing well, but since then its condition started worsening due to widespread irregularities and mismanagement of loan disbursements.

The company has now been struggling with a huge amount of non-performing loans, liquidity crisis, and negative interest margin. More than 90 per cent of disbursed loans turned toxic.

The company did not receive any interests against bad loans from its clients. Moreover, the company has to keep provisions against the default loans, leading to huge losses.

In the financial statement for 2023, the auditor of the company raised a red flag for the continuation of business by the company as its key financial indicators were in the negative over the past few years.

Premier Leasing is yet to disclose detailed annual financial statement for 2024 such as interest income and interest payment for the year.

The net operating cash flow per share, a measure of a company's ability to generate cash from its operations, reduced to Tk 22.92 per share for 2024, from Tk 26.41 per share in the previous year.

Along with high default loans, the asset quality of the company deteriorated drastically, leaving a huge impact on its earnings.

The net asset value, which refers to the excess of total assets over total liabilities, stood at negative Tk 74.36 per share in 2024 from negative Tk 46.79 per share the previous year.

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