Islamic Finance suffers loss of Tk 5.61m in Q2

Islamic Finance & Investment, a publicly traded non-bank financial institution, reported a loss of Tk 5.61 million in the April-June quarter this year, attributed to an increase in provisions and profit suspense against non-performing loans.
According to the company's disclosure on Monday, the earnings per share stood at Tk 0.04 in the negative, compared to Tk 0.32 in the positive for the same quarter the previous year.
As the company suffered losses in the second quarter, its net profit plunged 97 per cent year-on-year to Tk 2.80 million in the six months through June this year.
Profit decreased substantially due mainly to an increase in provisioning against defaulted loans and a higher cost of funds, said an official of the company.
For January-June 2023, the company's net operating cash flow per share was negative Tk 2.26, an improvement compared to the negative Tk 13.42 for the corresponding period last year, thanks to the improvement of deposits during the same period.
In 2022, the company disbursed loans of Tk 3.72 billion without requiring any eligible security, such as a mortgage or a lien on shares, according to its independent auditor.
In the audit report for 2022, Kazi Zahir Khan and Co mentioned that the collateral-free loans represented almost 31 per cent of the company's total leases, loans and advances.
According to the Bangladesh Bank guidelines, collateral refers to an asset pledged by a borrower to a lender until the loan is fully repaid. In case of borrower default, the lender has the right to seize the collateral and sell it to settle the outstanding loan.
The annual profit of Islamic Finance also saw a decline of 77 per cent to Tk 42 million in 2022. Consequently, the company distributed a 5 per cent cash dividend in 2022, down from the 10 per cent cash dividend in 2021.
Listed in 2005, the company's stock has been languishing at the floor price of Tk 19.70 since October last year.

babulfexpress@gmail.com