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Q3 2023

GSP Finance in big losses over classified loans

Staff Correspondent
20 Dec 2023 21:10:40 | Update: 20 Dec 2023 21:10:40
GSP Finance in big losses over classified loans

GSP Finance Company (Bangladesh) Ltd – a non-bank financial institution (NBFI) – posted its first major losses after listing in the stock market during the third quarter of 2023, due to inter-institutional loan classification.

In its financial report for the July-September period published on the Dhaka Stock Exchange (DSE) website on Wednesday, the company reported a net loss of Tk 43.19 crore, compared to Tk 2.87 crore in profits posted during the same period last year.

GSP Finance posted a loss per share of Tk 2.75 in the third quarter, compared to earnings of Tk 0.18 year-on-year. The company made a profit every year except 2022 since its listing in the stock market. Besides, more or less equal profit figures were posted in all quarters.

But the company has been reporting losses since Q1 of 2023. As a result, the company made losses in the third quarter as well, which is attributed to the instructions of the Bangladesh Bank.

Mizanur Rahman, company secretary of GSP Finance Company (Bangladesh) Ltd, told the Business Post on Wednesday, “We have been making profits every year.

“But in early 2023, a directive from the Bangladesh Bank said the categorisation policy will be applicable for inter-institutional loan repayments as well, which was not the case earlier. Mainly because of the classification of inter-institutional loans, the institution suffered massive losses.”

He said that basically, in the third quarter, a total of Tk 249 crore was classified.

GSP Finance was incorporated in 1995, and was listed on the stock exchange in 2012. It has a subsidiary company, GSP Investments Ltd, whose business is fully dependent on the capital market.

Mizanur Rahman said if the capital market is good, it will be possible to overcome losses and return to profitability quickly.

A review of GSP Finance Company’s third quarter financial report shows that the company's earnings per share in 2016 were Tk 0.39, and net profit after tax was Tk 4.13 crore.

Then, in the third quarter of 2017, it posted the highest earnings per share of Tk 0.58, and a net profit of Tk 7.41 crore. The company's net profit for the third quarter of 2020, 2021, and 2022 was Tk 6.28 crore, Tk 7.18 crore, and Tk 2.87 crore, respectively.

Consolidated net operating cash flow per share (NOCFPS) was negative Tk 1.49 for January-September 2023, compared to negative Tk 0.28 for the January-September period of 2022. The consolidated net asset value (NAV) per share was Tk 23.53 as of September 30, 2023, and Tk 27.78 as of December 31, 2022.

According to the GSP Finance website, company Chairman Feroz U Haider and Member of Parliament Saber Hossain Chowdhury are directors and vice chairman of the organisation.

Dr ATM Shamsul Huda, former chief election commissioner of Bangladesh, is also a director and vice chairman of the company.

In the nine months of 2023, GSP Finance Company’s earnings per share in the period stood at negative Tk 4.25, which was Tk 0.63 in the same period of previous year. The company made a profit till 2021, but made its first losses of Tk 16.96 crore in 2022.

GSP Finance sponsors and directors jointly hold 33.50 per cent of the company’s total shares, while institutions held 19.16 per cent and the general public held 47.34 per cent as of November 2023.