Six listed NBFIs’ bad loans soar sharply in 2021

Bad loans of listed six non-bank financial institutions (NBFIs) have increased in 2021 hit by the pandemic, according to their financial reports.

The total default loan of the NBFIs is Tk …. crore, an increase of …..per cent from Tk ….crore a year ago, according to their latest annual reports filed with the Dhaka Stock Exchange.

The NBFIs are IPDC Finance, United Finance, Delta Brac Housing Finance Corporation, LankaBangla Finance, IDLC Finance and National Housing Finance and Investments.

Covid-19 has generated significant instability and high volatility in the markets, leaving an adverse impact on the loan recovery, according to industry people.

IPDC Finance Limited’s non-performing loans (NPLs) or bad loans climbed by 315 percent to Tk 83 crore in 2021, up from Tk 20 crore a year earlier. This is the highest increase in bad loans among the six NBFIs.

During the period, it was followed by United Finance Limited that saw an 80.32 percent rise in NPLs to Tk 83 crore, up from Tk 25 crore.

“Bad loans increased in the last year mainly due to the relaxed regulations by the Bangladesh Bank during the pandemic,” United Finance Company Secretary Sharmi Noor Nahar told The Business Post.

“However, the debt loans are being recovered as before. Hopefully, the reflection of this can be seen in days to come,” he said.

IPDC Finance Managing Director and CEO Mominul Islam told The Business Post, “For various reasons, including Covid-19, loans turned bad. Yet, the situation has been improving faster as we’re recovering from the Covid-19 impact.”

Delta Brac Housing Finance’s NPLs soared by 74 percent to Tk 25 crore in 2021, up from Tk 14 crore a year earlier.

LankaBangla Finance Limited’s NPLs stood at Tk 262 crore in 2021, up 60 percent from Tk 163 crore a year earlier.

During the period, IDLC Limited’s NPLs increased by 56 percent to Tk 129 crore, up from Tk 82 crore and National Housing Finance’s NPLs rose by 16 percent to Tk 57 crore, up from Tk 49 crore.

Bangladesh Finance Limited Kyser Hamid Managing Director and CEO told The Business Post, “Basically, recovery of bad loans impacted due to Covid-19 pandemic.”

“We kept our operation functional even when all kinds of activities were closed during. And loans were given only to those who were able to repay the loans. As a result, our bad debt has decreased compared to the previous year,” he added.