Top 10 cos account for 67 per cent of total portfolio
Thursday, 10 December 2009
Raihan M Chowdhury
Financial Institutions (FIs) have recorded a 12 per cent growth in their business in the period ended September 30 last and the growth is expected to reach 15 per cent by the end of the year.
"The businesses in the real estate sector and stock market in the year propelled the growth, on the other hand, leasing and term loan businesses declined in the period," chairman of Bangladesh Leasing and Finance Companies Association (BLFCA) Mafizuddin Sarker told the FE.
Market insiders said the budgetary provision of whitening undisclosed money through investing in some selected sectors including the real estate and Bangladesh Bank's 'housing refinancing scheme' boosted the house financing in the period.
According to the Bangladesh Leasing and Finance Companies Association (BLFCA), top 10 FIs accounted for a whopping 67 per cent of the total portfolio of 28 companies, known as non-banking financial institutions (NBFIs).
The top ten FIs, in terms of portfolio as on September 30 of the year were IDLC Finance, DBH, International Leasing and Financial Services Ltd (ILFSL), LankaBangla Finance, Phoenix Finance, Uttara Finance, United Leasing, People's Leasing, Prime Finance & Investment and IPDC.
At present 28 FIs are operating in the country.
The portfolio of IDLC Finance, DBH, ILFSL, LankaBangla Finance and Phoenix Finance as on September 30, 2009 stood at Tk 18,276 million, Tk 14,146 million, Tk 12,288 million, Tk 8,487 million and Tk 8,200 million respectively.
On the other hand, in terms of net profit, the top five companies were LankaBangla Finance, IDLC Finance, Prime Finance, Uttara Finance and DBH.
The net profits of LankaBangla Finance, IDLC Finance, Prime Finance, Uttara Finance and DBH during the period stood at Tk 525 million, Tk 453 million, Tk 409 million, Tk 345 million and Tk 225 million.
Talking to the FE, the BLFCA chairman said the FIs should be allowed to be involved in the remittance business.
"If Bangladesh Bank issues AD (authorized dealer) licence in favour of the FIs, we can involve us with the remittance business, which will ultimately play an important role in the economy," Mr Mafiz said.
The BLFCA chief also demanded of the government to restore the depreciation allowance on leased assets as it will lead to great increase of corporate tax on the NBFIs.
An amendment to the third schedule of Income Tax Ordinance, 1984 withdrew the depreciation allowance to the leasing industry.
"We had been enjoying the facility during the last 22 years but all on a sudden in the budget of 2007-08, it has been withdrawn giving a blow to our business which emerged as an alternative source of finance and well-sought-after-arm for credit for all kinds of enterprises, especially for the small and medium enterprises (SMEs)," Mafiz, also the managing director of LankaBangla Finance said.
Financial Institutions (FIs) have recorded a 12 per cent growth in their business in the period ended September 30 last and the growth is expected to reach 15 per cent by the end of the year.
"The businesses in the real estate sector and stock market in the year propelled the growth, on the other hand, leasing and term loan businesses declined in the period," chairman of Bangladesh Leasing and Finance Companies Association (BLFCA) Mafizuddin Sarker told the FE.
Market insiders said the budgetary provision of whitening undisclosed money through investing in some selected sectors including the real estate and Bangladesh Bank's 'housing refinancing scheme' boosted the house financing in the period.
According to the Bangladesh Leasing and Finance Companies Association (BLFCA), top 10 FIs accounted for a whopping 67 per cent of the total portfolio of 28 companies, known as non-banking financial institutions (NBFIs).
The top ten FIs, in terms of portfolio as on September 30 of the year were IDLC Finance, DBH, International Leasing and Financial Services Ltd (ILFSL), LankaBangla Finance, Phoenix Finance, Uttara Finance, United Leasing, People's Leasing, Prime Finance & Investment and IPDC.
At present 28 FIs are operating in the country.
The portfolio of IDLC Finance, DBH, ILFSL, LankaBangla Finance and Phoenix Finance as on September 30, 2009 stood at Tk 18,276 million, Tk 14,146 million, Tk 12,288 million, Tk 8,487 million and Tk 8,200 million respectively.
On the other hand, in terms of net profit, the top five companies were LankaBangla Finance, IDLC Finance, Prime Finance, Uttara Finance and DBH.
The net profits of LankaBangla Finance, IDLC Finance, Prime Finance, Uttara Finance and DBH during the period stood at Tk 525 million, Tk 453 million, Tk 409 million, Tk 345 million and Tk 225 million.
Talking to the FE, the BLFCA chairman said the FIs should be allowed to be involved in the remittance business.
"If Bangladesh Bank issues AD (authorized dealer) licence in favour of the FIs, we can involve us with the remittance business, which will ultimately play an important role in the economy," Mr Mafiz said.
The BLFCA chief also demanded of the government to restore the depreciation allowance on leased assets as it will lead to great increase of corporate tax on the NBFIs.
An amendment to the third schedule of Income Tax Ordinance, 1984 withdrew the depreciation allowance to the leasing industry.
"We had been enjoying the facility during the last 22 years but all on a sudden in the budget of 2007-08, it has been withdrawn giving a blow to our business which emerged as an alternative source of finance and well-sought-after-arm for credit for all kinds of enterprises, especially for the small and medium enterprises (SMEs)," Mafiz, also the managing director of LankaBangla Finance said.