Uttara Finance publishes financials after 5 years, posts Tk435cr loss in 2020

Infographic: TBS

After a five-year hiatus, Uttara Finance and Investments Limited has finally published its long-delayed financial statement, revealing a staggering loss of Tk435.54 crore for the year ended 31 December 2020.

The non-bank financial institution (NBFI) has been mired in controversy and regulatory action following allegations of massive irregularities in its loan operations and financial reporting.

According to the newly disclosed audited statement, the company incurred a net interest loss of Tk61.17 crore, an operating loss of Tk108.31 crore, and a net loss after tax of Tk435.54 crore in 2020.  Its loss per share stood at Tk33.13, reflecting severe erosion in profitability and capital base. 

The auditor's report stated that the company's financial performance has been deteriorating year by year, with a capital shortfall of Tk711.55 crore as of December 2020.

Masrur Imtiaz and Co, the auditor and a member firm of KPMG Bangladesh, in its qualified opinion published on the Dhaka Stock Exchange (DSE) website on Monday, noted that discrepancies were found between previous years' balances and the latest accounts. 

The audit firm said the figures had been restated following a special audit conducted as per instructions from the Bangladesh Bank. The central bank had earlier rejected the company's financial report for 2019 due to major inconsistencies, prompting a restatement through a special audit.

The audit revealed that Uttara Finance's eligible capital was negative Tk59.34 crore against a required capital of Tk652.21 crore, resulting in a shortfall of Tk711.55 crore. The company's capital adequacy ratio stood at a negative 0.91%, far below the regulatory requirement of 10%. 

According to the auditor, the company's core capital, or Tier-I capital, was also negative at Tk85 crore, against its risk-weighted assets of Tk652 crore.

The audit report also exposed severe irregularities in Uttara Finance's operations. The company had provided Tk147.34 crore in loans to its subsidiary, UFIL Capital Management Limited, while unauthorised transactions amounting to Tk1,373 crore were identified during a special audit. 

The report said these transactions were conducted without following internal procedures, borrower due diligence, or Bangladesh Bank's prudential lending guidelines. Furthermore, the repayment of loans to the subsidiary was irregular, and in some cases, equity capital was injected into the subsidiary, which was then used to repay the loans — a clear violation of financial norms.

The auditor also found that Uttara Finance recorded Tk1,654 crore in receivables related to unauthorised transactions, most of which involved related parties and had remained unadjusted for over a year. Against these assets, the company recorded a block liability of Tk2,150 crore as per Bangladesh Bank's directive, but no provision was maintained for the unauthorised transactions, violating the central bank's provisioning rules.

What was in the 2019 statement

Uttara Finance's 2019 financial statement, which was originally published in 2020, had reported a profit of Tk118 crore and dividends of 15% cash and 5% stock. That report, audited by SF Ahmed & Co, was later rejected by the Bangladesh Bank after KPMG Bangladesh identified discrepancies involving Tk5,300 crore in the company's financial records. 

Following these revelations, the central bank dissolved the NBFI's sponsor-director board and appointed new directors in 2022 to restore governance and accountability.

Uttara Finance's stock performance has remained weak amid its prolonged governance crisis. On Monday, its shares closed 1.52% lower at Tk13 each on the DSE. 

The stock continues to trade under the "Z" category due to the company's failure to hold its annual general meetings on time. 

As of August 2025, sponsors and directors held 44.44% of shares, institutional investors owned 32.50%, foreign investors 7.82%, and general investors 15.24%.