Profits of listed NBFIs witness mixed trends

Profits of listed non-bank financial institutions (NBFI) witnessed mixed trend in first half of 2015 calendar year over the corresponding period of the last year.
Market insiders said political unrest affected their loan recovery which ultimately cast a negative impact on their profit margins. However, institutions which have diversified products and satisfactory recovery performance maintained their growth.
Out of the 23 NBFIs listed with the Dhaka Stock Exchange (DSE), that account for around 5.90 per cent of the DSE's total market capitalisation, 20 have disclosed their half-yearly financial reports while three are yet to publish their reports as they consider June to be year-ending, data available from DSE showed.
Among them, consolidated profits (un-audited) of 11 FIs rose while 9 saw less profit in the first half in 2015 compared to same period last year. Delta Brac Housing Finance, ICB and Midas Financing are yet to publish half-yearly reports.
The companies whose profits rose are: IDLC Finance, Bangladesh Industrial Finance Company, FAS Finance and Investment, GSP Finance, Industrial Promotion & Development Company of Bangladesh, National Housing Finance and Investment, Premier Leasing and Finance, Prime Finance, United Finance, Union Capital and Uttara Finance, the DSE data showed.
IDLC Finance has reported consolidated profits (un-audited) of Tk 816.94 million with earnings per share (EPS) Tk 3.15 in the first half in 2015 against Tk 306.67 million and Tk 1.22 respectively in the same period of last year.
The profits of BIFC rose to Tk 136.92 million with EPS Tk 1.36 in the January-June period in 2015 which was Tk 47.32 million and Tk 0.47 respectively in the corresponding period of last year.
FAS Finance' profits stood at Tk 56.99 million with EPS Tk 0.51 in the first half in the current calendar year against Tk 29.06 million and Tk 0.26 in the same period a year ago.
GSP Finance has reported consolidated net profits of Tk 57.55 million with EPS Tk 0.55 in the first half in 2015 against Tk 55.45 million and Tk 0.53 respectively in the same period a year ago.
The profits of IPDC stood at Tk 83.33 million with EPS Tk 0.66 in the January-June period in 2015 which was Tk 53.03 million and Tk 0.42 in the same period of last year.
National Housing Finance's profits rose to Tk 119.16 million with EPS Tk 1.12 in the first half in 2015 which was Tk 100 million with EPS Tk 0.94 in the same period a year ago.
Premier Leasing has reported profits of Tk 15.32 million with EPS Tk 0.14 in the first half in 2015 which was Tk 5.47 million and Tk 0.05 in the corresponding period of last year.
The profits of Prime Finance stood at Tk 231.98 million with EPS Tk 0.85 in the first half in 2015 against Tk 139.19 million and Tk 0.51 in the same period of last year.
Union Capital's profits rose to Tk 54.53 million with EPS Tk 0.41 in first half in the current calendar year which was Tk 39.89 million and Tk 0.30 respectively in the same period of last year.
The profits of United Finance stood at Tk 138.47 million with EPS Tk 0.90 in the first half in 2015 which was Tk 136.51 million and Tk 0.88 in the corresponding period of last year.
Uttara Finance's profits rose to Tk 586.03 million with EPS Tk 4.68 in the January-June period in 2015 against Tk 567.25 million and Tk 4.53 in the same period a year ago.
Akter Hossian Sannamat, former managing director of Union Capital, said, profit growth of institutions depend on good products as per clients needs and performance of loan recovery.
"The companies which have a good asset quality, diversified products and satisfactory loan recovery performance are maintaining their profit growth," said Mr Sannamat, also a capital market analyst.
He said the main source of income of the institutions is financing. "As investment in private sector slowed down, many institutions' profits declined," he said adding that negative equity also eats up many institutions' profit margin.
The NBFIs which saw less profit during the period are: Bay Leasing & Investment, Bangladesh Finance and Investment Company, Fareast Finance and Investment, First Finance, International Leasing & Financial Services, Islamic Finance & Investment, LankaBangla Finance, Phoenix Finance, Peoples Leasing & Financial Services.
Asad Khan, chairman of the Bangladesh Leasing and Finance Companies Association, said political unrest in 2013 and first quarter of 2015 affected the loan recovery which ultimately weighed on profits margin of many institutions.
Mr Khan said NBFIs also invest in capital market, but sluggish capital market scenario also affects their profits while many of their equity turned negative.
Mr Khan, also the managing director of Prime Finance and Investment Ltd, however, expressed optimism that they will make good business in coming days amid an improved political climate.
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