IDLC Finance's 2023 profit lowest in 8 years
FE REPORT | Thursday, 14 March 2024
IDLC Finance has reported its lowest profit in eight years for 2023, as, it says, low interest spread and weak capital market hampered its business.
"Two years ago, the difference between what we paid as deposit rate and what we could charge as lending rate was more than 5 per cent. But our cost of fund has increased recently. We are paying much higher to our depositors [compared to what IDLC Finance charges against loans]," said Chief Executive Officer Masud Karim Majumder.
The interest margin shrank to 3.25 per cent.
"Unfortunately, both the money market and the capital market were in a bad shape in 2023. It normally does not happen."
In 2022, IDLC Finance had a higher income than any other NBFIs in the country.
IDLC Finance's income from the capital market declined in 2023, compared to the year before, due to the floor price imposition. There was hardly any opportunity to make capital gains while dividend income also fell. Income in the form of brokerage commission dissipated as trading in stocks dwindled.
"We are yet to recover from the post-Covid situation. Our customers' repayment behavior is still very weak so we had to keep more provisions, which affected our profit," said Mr Majumder.
IDLC Finance declared a 15 per cent cash dividend for 2023.
After the earnings disclosure, the stock dropped on the premier bourse by 1.83 per cent on Wednesday to Tk 37.50 per share.