IDLC Finance reports Q1 2023 consolidated profit of Tk344 million

IDLC Finance Limited, the country's largest non-bank financial institution, has reported a consolidated profit after tax of Tk344 million for the 1st Quarter of 2023 against Tk483 million in the 1st Quarter of 2022.

The details of 1st Quarter financials were declared on its 326th board meeting on 14 May, said a press release. 

The consolidated net profit after tax decreased by 29% from the same quarter of the previous year. The rate cap imposed by the central bank resulted in lower interest income and higher payments on deposits. At the same time, capital market income has decreased as well. These two facts were reported as the major reasons behind the fall in profit.

In Q1 2022, the lending business operated on an open market and risk-based pricing system. However, in July 2022, the central bank imposed a mandatory rate revision on NBFIs, significantly decreasing the interest income from lending operations.

Furthermore, the ongoing liquidity pressure in the market since the second half year of 2022 created a deposit rate push, the impact of which was the hike in the cost of funds.

These resulted in the net interest income fall by Tk134 million compared to the same quarter of the previous year.

On the other hand, the capital market has been challenging since the second half of 2022. On such grounds, the operating profit has been negatively impacted. The broad index, DSEX, remained flat in Q1 2023 after a 4.7% correction in Q4 2022 and an 8.1% correction in 2022. Affected by the macroeconomic scenario and the imposition of a floor price, the daily average turnover stood around Tk4.8 billion in Q1 2023, 58% down from Q1 2022.

Consequently, income from capital market operations also declined significantly.

Additionally, operating expenses rose by 10% to Tk741 million in the quarter as salary and allowances, legal and advertising expenses hiked, along with other consumables due to inflation growth in the economy.