Bay Leasing incurs Tk120cr loss in 2.5 years
Bay Leasing’s core business experienced a significant decline due to several large loan defaults
Bay Leasing and Investment Limited, a non-bank financial institution (NBFI), reported a loss of Tk120 crore over a two-and-a-half-year period till 30 June 2023.
Bay Leasing faced a loss for the first time in 2021, and since then, it has been unable to return to profitability in any subsequent quarters.
During the period, the company's core business, which is net interest income, experienced a significant decline due to several large loan defaults.
Besides, the gradual increase in the cost of borrowing further contributed to the company's financial losses.
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Loss after tax shows a substantial increase due to a fall in interest income and also investment income, the company said in a disclosure on the Dhaka Stock Exchange on Thursday.
The disclosure added that net operating cash flow per share also reflected a substantial downtrend due to encashment of bank and corporate deposits, withdrawal of treasury placements.
The NBFI sector has been experiencing lack of stakeholders' confidence and struggling for cash flow crisis since the mid of 2019 due to the unveiling of significant irregularities in a number of companies, the company's former chairman Dr Maswooda Ghani said in its financial report for 2021.
Besides, most of the banks, the prime sources for the fund of NBFIs, refrained themselves to extend credit facilities or to provide fresh deposit to the financial institutions, she further said.
"This resulted in a catastrophic impact on the sector and Bay Leasing also faced the consequences of it," she explained.
Meanwhile, the board of Bay Leasing failed to recommend any dividends for the year 2022, which ended on December 31, owing to a Tk83 crore loss incurred during that period.
In 2021, it recommended a 5% stock dividend despite incurring loss of Tk14 crore, but the stock market regulator did not approve it.
In July this year, the board of directors appointed a new chairman and vice-chairman, hoping the company will overcome its challenges with the new leadership.
Bay Leasing shares had peaked at Tk36.4 on the Dhaka bourse before news of the company's losses surfaced. However, after the news was published, the shares fell, and have been stuck on the floor price at Tk23.9 each since 15 September 2022.
