Most non-banking financial institutions lose profitability

The earnings per share (EPS) of most of the listed non-banking financial institutions (NBFIs) fell in the nine months to September this year compared to that of the corresponding period of last year.

Of the 23 listed NBFIs with Dhaka Stock Exchange (DSE), 20 NBFIs disclosed their earnings per share (EPS) for January-September, 2020 so far to date.

Of them, 12 NBFIs saw their consolidated EPS fall in the January-September period while eight earned returns, according to the un-audited financial statements.

EPS is the portion of a company’s profit allocated to each share. In short, it serves as an indicator of a company’s profitability.

Market operators said lack of new investments thanks to a liquidity shortage amid Covid-19 pandemic cast a gloom over the NBFIs during the period under review.

“Most of the financial institutions could not borrow from the banking sector as per their demand and hence the decline in their earning per share,” said a managing director of a leading non-bank financial institution, seeking anonymity.

He noted that huge amounts of provisioning due to non-performing loans also ate into the profits of the NBFIs.

However, some NBFIs made huge capital gain from the stock market as the market showed upturn during the period under review riding on regulatory moves to restore discipline in the country’s capital market, he added.

DSEX, the prime index of the DSE, jumped 511 points, or 11.48 per cent in the January-September period of the year.

Among the listed NBFIs, Uttara Finance incurred the highest loss during the period under review, tumbling 80.75 per cent to Tk 1.68 in January-September, 2020, which was Tk 8.73 in the same period of the previous year.

In the three months from July to September, the EPS of the Uttara Finance turned minus Tk 1.19. At the same quarter last year, its EPS per share was Tk 2.68.

The consolidated EPS of FAS Finance also slumped 57 per cent to Tk 0.15 in January-September, 2020.

EPS of Delta Brac Housing Finance, GSP Finance, IPDC Finance, Phoenix Finance, Prime Finance, United Finance also declined in January-September, 2020 period.

Bangladesh Industrial Finance and Fareast Finance EPS decreased losses while First Finance and Union Capital’s losses increased during the period.

On the other hand, EPS of Bangladesh Finance & Investment, Bay Leasing, IDLC Finance, Islamic Finance, LankaBangla Finance, Midas Financing, National Housing Finance, and Premier Leasing increased in January-September period.

Bangladesh Finance & Investment’s EPS has increased by 628 per cent in the first nine months of this year.

The BD Finance’s consolidated EPS jumped to Tk 1.02 for January-September 2020 as against Tk 0.14 for January-September 2019.

The company officials said EPS increased significantly due to realisation of capital gain from investment in shares as against capital loss compared to the same period of pervious year.

The consolidated EPS of Bay Leasing soared 300 per cent to Tk 1.04 for January-September, 2020 as against Tk 0.26 for January-September, 2019.

The company officials said EPS increased due to investment income and operating income increased by 427.99 per cent and 73.43 per cent respectively during the period under review.

LankaBangla’s consolidated EPS rose 83 per cent to Tk 0.88 for January-September 2020 as against Tk. 0.48 for January-September 2019.

Its consolidated EPS for three months for July-September 2020 also stood at Tk 0.74 for as against minus Tk 0.002 for July-September 2019.


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