Union Capital’s H1 losses widen on lower interest income, loan recoveries
The company attributed the weaker earnings to lower recoveries from non-performing loans, which reduced both interest income and provision releases during the first half.
Listed non-bank financial institution (NBFI) Union Capital Limited reported a wider loss in the first half of 2026 as lower interest income and weaker recoveries from non-performing and written-off loans weighed on its earnings.
According to the company's unaudited financial statements published on the Dhaka Stock Exchange (DSE) website, its consolidated loss per share (EPS) widened to Tk2.12 for the January-June period, compared with a loss of Tk1.60 in the corresponding period last year.
Despite the weaker financial performance, the company's share price rose 8.70% to Tk5 on the DSE today (22 July).
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The company's quarterly performance, however, showed some improvement. For the April-June quarter, Union Capital posted a consolidated loss per share of Tk1.18, down from a loss of Tk1.53 in the same quarter of 2025.
Its operating cash flow also deteriorated during the period. Consolidated net operating cash flow per share (NOCFPS) turned negative at Tk0.18 for the first six months of 2026, compared with a positive Tk0.89 a year earlier, reflecting weaker cash generation from core operations.
Union Capital's financial position weakened further, with its consolidated net asset value (NAV) per share falling to negative Tk67.61 as of 30 June 2026 from negative Tk65.49 at the end of December 2025, indicating a further erosion of shareholders' equity.
The company attributed the weaker earnings to lower recoveries from non-performing loans, which reduced both interest income and provision releases during the first half. Recoveries from previously written-off loans also declined, further hurting profitability.
Union Capital has remained under financial strain for several years due to high levels of default loans, liquidity constraints and sluggish lending. Although it has been working to improve asset quality and strengthen loan recoveries, the latest results suggest limited progress.
Listed on the stock market in 2007, Union Capital provides lease finance, term loans, SME financing, corporate finance and other financial services.
The broader NBFI sector in Bangladesh has been under pressure in recent years amid rising default loans, weak corporate governance, funding shortages and slower business growth, leaving many institutions with mounting losses and deteriorating capital positions.
