IDLC Finance records steady growth in returns from assets

Dhaka,  Wed,  23 August 2017
Published : 17 May 2017, 22:19:27

IDLC Finance records steady growth in returns from assets

Subsidiary co to float MF
FE Report

The IDLC Finance, one of the leading non-banking financial institutions, witnessed a steady growth in returns from assets in the last three recent years reflecting the management's efficiency of generating earnings.

According to the financial statement for the year that ended on December 31, 2016, the company's return on assets (ROA) ratio stood at 2.33 per cent which was 2.28 per cent in 2014 and 2.20 per cent in 2015.

Arif Khan, managing director of the IDLC Finance, said during January-March period, 2017, their company's ROA ratio reached 2.80 per cent which is the highest ratio in the country's financial sector.

The ROA is an indicator of how profitable a company is relative to its total assets and gives an idea as to how efficient management is in using its assets to generate earnings.

The company has also reported consolidated EPS of Tk. 7.08, consolidated NAV per share of Tk. 35.56 for the year ending on December 31, 2016 as against Tk. 5.81 and Tk. 30.97 respectively for the same period of the previous year.

For the year ending on December 31, 2016, the IDLC board of directors recommended 30 per cent cash dividend against 25 per cent disbursed in the previous year.

The company's operating income rose to above Tk 5.15 billion in 2016 which was 12 per cent higher than the income of 2015.

While stressing efficient management for proper functioning and good returns of any company,  Mr Arif Khan said the percentage of their company's non-performing loans (NPLs) has also come down to 2.80 per cent whereas the percentage of the sector's NPLs is around 10 per cent.

Mr Khan said loans are approved at different levels of their company's management considering proper disbursement and the interest of the company and shareholders as well.

According to the financial statement for the year ending on December 31, 2016, the IDLC Finance incurred a consolidated net profit of above Tk 1.78 billion which was 22 per cent or Tk 321 million than that of the previous year.

In 2016, the company's net operating income stood at over Tk 5.16 billion which is above Tk 475.98 million from the investment income. The company's investment income rose 28 per cent in 2016 compared to that of the previous year.

The IDLC Finance has set another target of restoring investors' confidence on mutual funds (MFs).

The company's managing director said the country's mutual fund sector is 'un-trusted' and the IDLC Finance is making an effort of regaining investors' trust on MFs.

Meanwhile, the IDLC Finance has launched an asset management company, a subsidiary company, which will float a MF on May 22.   

"We are going to float the MF with commitment and unit holders will get more disclosures beyond the regulatory requirement," said Mr Khan, also a former commissioner of the securities' regulator.

The IDLC Finance, which was listed with the stock exchanges in 1992, has two other subsidiaries. The subsidiaries are IDLC Securities and IDLC Investments.

According to information of Dhaka Stock Exchange (DSE), the sponsor-directors hold 59.66 per cent shares of the IDLC Finance whereas institutions hold 20.54 per cent shares, foreign investors 4.04 per cent shares and general investors 15.76 per cent shares.

Meanwhile, the IDLC Finance has raised a fund worth over Tk 2.51 billion through rights offer to accelerate activities regarding SME, consumer and corporate lending portfolios.
Editor : A.H.M Moazzem Hossain
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