IDLC Finance profits shrank 21% in 2023

IDLC Finance Ltd, the country's largest non-bank financial institution, posted a 21% year-on-year profit decline in 2023 owing to shrunk margins and a capital market slowdown.

During the year, the consolidated profit after tax of the company stood at Tk151.31 crore, which was Tk191.45 crore in 2022.

In 2023, the consolidated earnings per share of IDLC Finance stood at Tk3.64, down from Tk4.61 compared to the previous year. Its net interest income stood at Tk499 crore, which was Tk511 crore in 2022.

The company recommended a 15% cash dividend for its shareholders for the year ended in 2023. Earlier, the financial institution had paid the same dividend to its shareholders in 2022. 

According to the stock exchange website, the dividend declaration of the company was announced at a board meeting held on 12 March.

To secure the shareholders' approval for the dividend and the annual audited report, it will conduct the annual general meeting on 29 April, and the record date is 4 April.

A top official of the company, on the condition of anonymity, said the company had managed its business amid global economic instability along with local challenges last year.

He said within this year, the company has observed an increase in bank deposit costs due to the rise in government treasury bills or bond rates. Simultaneously, the lending rate has decreased. Consequently, the company's profit margin has decreased over the year, he added.

He further said IDLC Finance has three subsidiaries which operate capital market products. However, the subsidiaries could not achieve the expected return from the capital market due to the market slowdown. 

In the third quarter of 2023, due to decreases in net interest income, investment income, and Commission exchange and brokerage, the company experienced a 28% drop in earnings per share.

Its consolidated net asset value per share stood at Tk45.71 at the end of December 2023, and its consolidated net cash flow per share was Tk23.21 negative end of the year 2023.

The share price of the company was 1.83%, or Tk37.50 on the Dhaka stock exchange on Wednesday.

As of 31 January 2024, sponsor directors retain a 55.66% stake, institutional investors hold 27.93%, foreign investors 1.16% and general shareholders possess 14.25% of the company's shares.

IDLC Finance PLC, formerly Industrial Development Leasing Company of Bangladesh Ltd, is a multi-product non-banking financial institution. 

IDLC marks its presence in over 20 districts, represented by 40 branches and booths with over 1,700 employees, serving over 4,00,000 clients.