Midas Financing loss widens by 29% on net interest income slump
Key Financials
● Consolidated net profit after tax Tk86 lakh in 2022
● Net loss after tax Tk42.77 crore in H1 of 2023
● Outstanding loans Tk976.52 crore at the end of March 2023
● Classified loans Tk140.64 crore
● Last closing price of shares Tk10 each
Midas Financing Ltd reported a 29% increase in its consolidated net loss after tax, reaching Tk12.23 crore in the July–September quarter, primarily due to a decrease in net interest income.
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The consolidated loss per share was Tk0.85, representing an increase from a loss of Tk0.66 in the same period of the previous year.
"Non-performing loans have increased as the company suffered a business slowdown," Mustafizur Rahman, managing director of the non-bank financial institution, told The Business Standard.
"As a result, the net interest income of the company has dropped," he added.
He mentioned that borrowers typically reschedule their loans at the end of the year, which suggests that the balance sheet of the NBFI is anticipated to improve in the next quarter.
The board of directors has also decided to open the Shariah-based Islamic financing wing of the company and amend the relevant clauses of the Memorandum and Articles of Association, subject to the approval of the shareholders and regulatory authorities.
"It was our previous plan that we would open the Shariah-based Islamic financing wing. We are working to implement the plan," the managing director said.
"A number of customers want to be included in the Islamic financing wing. So we need to develop systems for this. We expect that we will launch a Shariah-based Islamic financing wing in December 2024," he added.
The company has also released its annual disclosure for 2022.
The board of directors recommended a 1.5% cash dividend for its shareholders in 2022.
The company also reported that its consolidated earnings per share were Tk0.06, which was Tk0.59 a year ago.
At the end of 2022, the company's consolidated net profit after tax was Tk86 lakh, which was Tk8.84 crore a year ago.
During the January-June period of 2023, its net loss after tax stood at Tk42.77 crore, which was Tk23.46 crore in the same period of the previous year.
Its net loss per share was Tk2.97, compared to a loss of Tk1.65 in the same period of 2022.
Midas Financing Ltd began its operation as an NBFI at the end of 1999, and it got listed on local bourses in the early 2000s.
At the end of March 2023, the outstanding loans of Midas Financing stood at Tk976.52 crore. Of which, the classified loans stood at Tk140.64 crore, representing 14.40% of the total loans disbursed.
On Tuesday, the shares closed at Tk10 each on the Dhaka Stock Exchange.
As of 30 September 2023, sponsor-directors hold 41.35%, institutional investors 26.60%, foreign shareholders 0.42%, and general shareholders 31.63% shares in the company.
