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Bangladesh Finance profit sinks 75% as investment returns narrow

Shakhawat Hossain Sumon
17 May 2023 00:00:00 | Update: 17 May 2023 00:12:37
Bangladesh Finance profit sinks 75% as investment returns narrow

Bangladesh Finance Ltd has registered a 75 per cent year-on-year slump in net profit in the first quarter of the year 2023.

The non-bank financial institution’s profit after tax in the first quarter of 2023 fell to Tk 1.88 crore from Tk 9.36 crore in the same period last year.

As per its unaudited financial statement, the listed company’s earnings per share (EPS) fell to Tk 0.10 for the January-March period this year from Tk 0.40 for the same period last year.

The company witnessed a significant plunge in interest income and investment income in the first three months this year, the prime reason behind its earnings fall, as per a filing posted on the Dhaka Stock Exchange (DSE) Tuesday.

Munshi Abu Naim, company secretary of Bangladesh Finance, said since the beginning of the year, many aspects of business changed. As a result, the earnings got deteriorated year-on-year in the first quarter of 2023.

The listed firm had posted a first quarterly profit of Tk 9.24 crore in 2021.

The non-bank financial institution’s profit was Tk 5.86 crore in the January-March quarter of 2020.

Although the company witnessed a staggering profit fall in the first quarter of 2023, it had reported a much lower annual profit decline of 8.2 per cent in 2022 over the previous year.

BD Finance, a concern of Anwar Group, had posted a consolidated profit after tax of Tk 23.5 crore in 2022, against the profit of Tk 25.6 crore in the previous year.

In 2022, the reason for the profit decline was providing additional interest suspense, higher provisions against stressed loans, leases, and advances, and lower income from investments in securities.

Its net asset value per share stood at Tk 17.51 at the end of March 2023.

The company’s net operating cash flow per share also decreased in Q1 this year due mainly to the net outflow of deposits, decrease in interest income, and payment of income tax liabilities, according to the company’s financial statement.

Sumit Podder recently joined Bangladesh Finance Capital, a subsidiary of one of the country’s leading financial institutions – Bangladesh Finance – as its managing director and chief executive officer.

In an interview with The Business Post after taking charge, he said, “Our plan is to provide 360-degree service from investment banking to portfolio management as well as research. We also want to give way to the clients, as they get funds and overall suggestions for business.”

“First of all, we will proceed with proper planning. A strong team will be put in place, with which we will move forward in alignment. If the team wins, we will win. So our first priority will be team dedication.”

“The second priority is to ensure full service to the customer, be it investment banking, portfolio management, or research. I hope we will be a top merchant bank in the next 5 years,” he added.

Listed in 2007, the company has a paid-up capital of Tk 188 crore, while its market capitalization is Tk 830 crore.

The company announced a 10 per cent cash dividend to shareholders for the year ended in December 2022.

Sponsor-directors held 31.20 per cent of the company’s total shares, while institutional investors 14.73 per cent, and general investors 54.07 per cent till April 30 of 2023.