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IDLC Finance, the country’s leading non-bank financial institution (NBFI), reported a 9.5 per cent year-on-year fall in net profit in the year 2022, as the NBFI’s earnings from its subsidiaries decreased due mainly to their lower returns from the capital market.
The publicly traded financial institution’s consolidated net profit profit dropped by Tk 20.15 crore or 9.5 per cent to stand at over Tk 191.45 crore in 2022, against Tk 211.60 crore in the previous year, as per the company’s financial report, which was disclosed at its board meeting on Thursday.
The NBFI’s three subsidiaries – IDLC Securities, IDLC Investments, and IDLC Asset Management – jointly saw their profits falling by 46 per cent last year over the previous year.
Their profits stood at Tk 29 crore in 2022, down from Tk 54 crore in the previous year.
A high official of IDLC Finance requesting anonymity said the capital market is one of the major sources of income for financial institutions, so the volatile market trend impacted its profit growth.
However, IDLC Finance alone made a net profit of Tk 161.96 crore in 2022, up from Tk 157.62 crore in the previous year.
Its consolidated earnings per share (EPS) dropped to Tk 4.61 for the year ended December 31, 2022, from Tk 5.09 in the year before.
The company announced a 15 per cent cash dividend for its shareholders for the year ended on December 31, 2022, which were 15 per cent cash and 5 per cent stock in the previous year.
The consolidated net asset value (NAV) per share also increased to Tk 43.56 in 2022, while its consolidated NOCFPS was negative Tk 21.10 last year.
IDLC Finance shares remained stuck at the floor price of Tk 46.50 per share since October 17, last year.
Established in 1985, IDLC Finance started leasing businesses in 1986.
In 1997, it expanded its activities into ‘short term finance’ (factoring of accounts receivable and work order financing) and ‘real estate finance’.
It also started car loan and personal loan services for individuals in 2004 and 2007, respectively.
IDLC’s current portfolio resembles a balanced exposure across SME, corporate, and retail segments. By the end of December 21, IDLC had
37.54 per cent exposure is in SME loans, while 33.71 per cent in retail loans, and 28.75 per cent in corporate loans.
The non-performing loan (NPL) ratio of IDLC exhibited an increasing trend from 2017 to H1 of 2022, reaching 3.49 per cent at the end of June last year, up from 2.77 per cent in 2017.
Earlier, in September 2022, EBL Securities Limited, a leading stockbroker in the country said in an equity note, the investment figure of IDLC Finance, put in the capital market represented Tk 354 crore or 59.73 per cent of its total investment, a large chunk in terms of investment fractions compared to those of many other listed companies.
As the capital market remains largely in positive territory in the 3rd quarter of the current fiscal year, investment capital of the listed company and income from its subsidiaries are expected to soar in the next quarter, said the equity note.
The loans and deposits of the publicly-traded company grew by 9.1 per cent and 2.7 per cent respectively, at the end of the first half of the current year, the equity note read.
The compound annual growth rates (CAGRs) of the non-bank financial institution’s loans and deposits in the last five years were 6.4 per cent and 5 per cent respectively, compared to the industry’s overall CAGRs of 3.7 per cent in loans and negative 1.2 per cent in deposits in the same period.
Currently, IDLC has a presence in over 24 cities, represented by 39 branches and booths with over 1,500 employees, serving over 45,000 clients.
