Shortfall in loan loss provisions drags down Premier Leasing
To maintain loan loss provisions against its classified loans and other liabilities, Premier Leasing and Finance Limited incurred a loss of Tk84 crore in the first nine months of 2021.
Owing to this, its net asset value per share dropped 48% to Tk9.81 year-on-year.
Auditor, Rahman Mostafa Alam and Co, mentioned in the company's audit report that the non-bank financial institution (NBFI) suffered a loan loss provision shortfall of Tk271 crore at the end of 31 December 2020.
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According to Bangladesh Bank data, Premier Leasing's classified loans stood at Tk766 crore at the end of June this year, which was 58% of its total in disbursed loans.
As the news of losses was disclosed, its share prices dropped 6.67% to close at Tk8.40 and stood fifth in the top ten loser list at the Dhaka Stock Exchange on Thursday.
Several stock market analysts said the company's profits have plummeted over the last five years due to irregularities and mismanagement of debt disbursements, even though it was in a good position at one time.
At the end of last year, its return on equity was negative 0.24%, which was positive 27% in 2015.
Upon a High Court order, the central bank last year appointed an administrator to the company. The order came after a depositor, failing to draw his savings from the NBFI, moved to court.
General depositors have a deposit of around Tk900 crore with the NBFI.
The Bangladesh Securities and Exchange Commission (BSEC) also appointed two independent directors to protect the interests of investors.
Subash Chandra Moulick, acting managing director of Premier Leasing, told The Business Standard, "Our company is currently going through a bad time due to a deficit in our loan loss provisions. But hopefully, we will be able to overcome the problems in the coming days."
AZM Akramul Haq, chairman of Premier Leasing, said in the 2020annual report which was published recently, that different stimulus packages declared by the Bangladesh Bank also affected revenue collection against investment which has worsened company liquidity, increasing non-performing loans.
