IDLC profit shrinks by 21% in H1 as interest income depletes 

IDLC Finance, a leading non-bank financial institution (NBFI) in Bangladesh, posted a 21 per cent year-on-year decline in profit in the first six months (January–June) of the current year, thanks to a decrease in net interest income.

The publicly traded company’s net profit fell to Tk 72.33 crore in January–June 2023 from Tk 91.87 crore reported in the same period one year ago.

As per its unaudited financial statements, IDLC’s consolidated earnings per share (EPS) declined to Tk 1.74 in January–June 2023 from Tk 2.21 in the same period last year.

The earnings decreased due to a fall in net interest income, investment income, commission exchange and brokerage, and other operating incomes, said IDLC in a filing posted on the Dhaka Stock Exchange (DSE) on Monday.

Besides, the NBFI posted a 13 per cent year-on-year lower profit to Tk 37.83 crore in the April-June quarter of 2023, which was Tk 43.65 crore in the same quarter the year before.

Its consolidated EPS fell to Tk 0.91 in the second quarter of 2023 from Tk 1.05 in April–June quarter of 2022.

As per its unaudited financial report, the publicly traded company’s consolidated net profit slumped to Tk 34.40 crore in Q1 this year from Tk 48.27 crore in the same quarter last year, sources at the company said.

The company’s first-quarter profit dipped due to a decrease in net interest income, investment income, commission exchange, brokerage, and an increase in incremental provision, officials familiar with the matter said.

IDLC Finance had 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 shrank last year due mainly to their lower returns from the capital market.

The publicly traded financial institution’s consolidated net profit dropped by Tk 20.15 crore or 9.5 per cent to Tk 191.45 crore in 2022, against the profit of Tk 211.60 crore in the previous year.

The NBFI’s three subsidiaries – IDLC Securities, IDLC Investments, and IDLC Asset Management – jointly saw their profits fall by 46 per cent in 2022 over the previous year.

Their profits stood at Tk 29 crore in 2022, down from Tk 54 crore in the previous year.

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.

The company gave a 15 per cent cash dividend for its shareholders for the year ended on December 31, 2022.