- 6% cash & 6% stock dividends declared for last year
- Non-performing loans down to 3.22% from previous 4.84%
- Operating cost fell by 15%
- Cost of funds decreased significantly
- 75% of total profit came from leasing business
- Remaining profit from capital market
The consolidated net profit of one of the leading non-banking financial institutions, Bangladesh Finance and Investment Company Limited (BD Finance), jumped by 61% to Tk30 crore in 2020 – despite the novel coronavirus pandemic that hit the country's economy.
In the last six years, the company reached its highest profit in 2020.
Md Kyser Hamid, managing director and chief executive officer of the company, told The Business Standard, "We set aside Tk9.5 crore in extra provisions last year, considering the tough year battered by the pandemic. Otherwise, we could have booked much higher profit. A sharp decrease in our cost of funds and 15% decrease in operating cost also helped us manage our yearly growth."
He said due to Covid-19, the central bank facilitated the manufacturing sector by suspending the interest on loan accounts last year.
"If the central bank withdraws the interest suspension facility this year, a portion of the manufacturing sector will not be able to repay the interest since the manufacturing business has yet to recover from the pandemic's impacts," added Kyser.
"That is why we are saying that this is a tough year. So, we made such provision to meet the upcoming difficulties," said the businessman.
Additionally, its competitor IDLC Finance and IPDC Finance also posted 49% and 10%, respectively, in net profit last year.
IDLC Finance said in its yearly earnings call that the company achieved growth in profitability.
The IDLC profit mainly came from investment income amid low lending opportunities, solving a few problematic loan accounts and a reduction of provisions against capital market investments.
Meanwhile, BD Finance recommended 6% cash and 6% stock dividends to its shareholders for the last year.
The company also stated that the stock dividend was issued to increase the capital base considering the size and the growth of the company's business.
To approve the dividend, the company set the record date for 11 March, to determine which shareholders are eligible for dividends, and the annual general meeting date for 31 March.
Md Kyser Hamid said, "Our two subsidiary companies that are engaged in the capital market business made a significant profit because of capital gain and good trade in stock exchanges."
Last year, DSEX, the prime index of Dhaka Stock Exchange (DSE), witnessed 21.31% and 35.10% growth on average daily market turnover.
Following the growth, the company earned Tk7.54 crore from the capital market. In the previous year, the company lost Tk3 crore.
The company was listed on the DSE in 2007 and its current paid-up capital is Tk1,167.53 crore. The price of each of its shares traded at the DSE on Thursday was Tk31.
At the end of January this year, sponsors and directors jointly held 30.32% of shares of the company while institutional investors and general investors owned 13.64% and 56.04%, respectively.