First-half profits of listed NBFIs record robust growth

Profits of listed non-bank institutions grew a 166 per cent in the first half of 2010 from a year earlier, helped by booming share trading and diversified operations.

During January through June 2010, the publicly listed non-banking financial institutions (NBFIs) posted Tk. 4.5 billion in net profits, up from Tk 1.7 billion in the same period a year ago, according to the half-yearly reports.

"Stock market operation has contributed substantially to such a phenomenal growth," said Arif Khan, deputy managing director of IDLC Finance Ltd.

The figures show only seven out of 21 institutions listed with stock exchanges recorded hefty profits, edging out the rest.

Prime Finance and Investment (PFI), IDLC Finance, LankaBangla Finance, Peoples Leasing and Financial Services Ltd (PLFSL), and United Leasing (ULC) emerged as top five performers, which saw their profits top 100 per cent in the year's first half.

However, profit of Industrial Promotion and Development Corporation (IPDC) swung to the negative terrain.

"Diversified operations are the key to such a remarkable growth," said Akter H Sannamat, managing director of the PFI. "Efficient management and skilled expertise also contributed," he added.

Prime Finance's profits were up by 321.73 per cent to Tk 1.0 billion, holding the top position among its peers.

LankaBangla Finance came second as it recorded a profit of Tk 829.9 million. The firm's profits were just Tk 302.01 million in January-June period of the last year.

IDLC Finance was the distant third with Tk 491.75 million in profits. The company's profits, however, shot up by 197.52 per cent from Tk 165.28 million in the same period a year ago.

Profits at Peoples Leasing stood at Tk 400.85 million, followed by United Leasing whose net income increased by 283.03 per cent to Tk 251.81 million.

Profits of ILFSL during the period reached Tk 226.97 million, Uttara Finance's Tk 372.58 million, Union Capital Tk 169.61 million, Bangladesh Finance Tk 111.55 million, Bay Leasing Tk 126.21 million, BIFC Tk 59.25 million, NHFIL Tk 80 million.

The bottom five earners include Fidelity Asset, First Lease International, Premier Leasing, Phoenix Finance and Islamic Finance.

Islamic Finance managed to earn just Tk 51.08 million in January-June period, from Tk 40.22 million the year before.

Half-yearly profits of the three NBFIs - ICB, DBH and Midas Finance - were not available.

The operations of non-bank financial firms range from credit disbursement and property investments to money trading and portfolio management.

But none are allowed to take deposits from the general public and can seek alternative avenues of finance such as issuing debt instruments.

Some 29 NBFIs are operating in Bangladesh, of which 21 are listed with Dhaka Stock Exchange and Chittagong Stock Exchange. The listed NBFIs make up 12.47 per cent of the market capitalisation.

Source: The Financial Express, August 16, 2010