Even the pandemic was unable to hinder growth of the 40-year-old NBFI as it posted a profit of Tk20.5 crore for the January to March quarter of 2021
IPDC Finance, Bangladesh’s first private-sector non-bank financial institution (NBFI), has dwarfed the bigger competitors in terms of the growth achieved in the past five years.
Even the pandemic was unable to hinder growth of the 40-year-old NBFI as it posted a profit of Tk20.5 crore for the January to March quarter (Q1) of the 2021 financial year, registering a 36.6% year-on-year (YoY) growth.
The NBFI, whose products and services range from corporate finance and advisory services in the corporate sector, middle market supply chain finance in the SME sector, to retail wealth management and retail finances, earned a revenue of Tk87.1 crore at the end of Q1'21 — up 35.4% from the revenues of last year.
According to data by the Bangladesh Bank, IPDC also saw its public deposits rise by 1.3% in Q1, which accounts for 66% of the source of funds for the institution.
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"We were able to accomplish this feat due to good corporate governance, proactive planning, and by practicing responsibility for customers, employees, and the community,” said IPDC Managing Director and CEO Mominul Islam.
“We rolled out a five-year strategy plan in 2016 and achieved phenomenal success, with eight times the asset growth and nine times the liability growth, keeping the NPL [non-performing loans] below 2% — the lowest among the listed NBFIs," he added.
The compound annual growth rate (CAGR) of IPDC Finance’s customer deposits grew by 52.9% between 2015 and 2020, standing at Tk4,138.1 crore in 2020.
Although competitor NBFI IDLC has seen more significant customer deposits that stood at Tk7,012.2 crore in 2020, it only registered a 13.1% CAGR between 2015 and 2020.
For the same period, LankaBangla Finance and Delta Brac Housing Finance Corporation (DBH) registered 13.1% and 11.8% CAGR, respectively.
Their customer deposits respectively stood at Tk4,133.4 crore and Tk3,727.7 crore in 2020.
Between 2015 and 2020, IPDC registered a 91% customer deposit growth, whereas other NBFIs had an overall growth rate lower than 2%.
Islam said that in contrast to the Indian NBFIs, where funds come from the bond market, Bangladeshi NBFIs are primarily dependent on deposits.
With customer deposits increasing by 91% over the last five years, IPDC offered strategic products entailing home loans, supply chain finance, and loans to SME and women entrepreneurs.
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IPDC's loans and advances increased by 7.5% to Tk5,761.9 crore at the end of March this year from January, according to data by the Bangladesh Bank.
Additionally, IDPC's loan portfolio mix currently stands at Tk5,7619 crore with a 7.5% year-to-date (YTD) growth in Q1 of 2021, with the loan to the SME sector standing at Tk1,709.7 crore and 3.8% YTD growth.
Islam further accorded IPDC's growth on the company's technology-enabled, socially responsible business models that focus on the cottage, micro, small and medium enterprises (CMSMEs), women and young entrepreneurs, and lower-middle-income households outside Dhaka and Chittagong.
Islam also said IPDC would continue to support businesses in need, especially the CMSMEs, as they are the largest economic segment that generates employment opportunities and contributes to the national GDP.
The NBFI's classified loan ratio currently stands at 0.95% — one of the lowest among publicly listed NBFIs in the sector. For the same category, IPDC registered a 27.8% CAGR between 2015 and 2020.
“Most of IPDC's clients are repaying their loans despite the moratorium facility,” Islam said.
In terms of revenue, IPDC exhibited a 4.4 times growth between 2015 and 2020. For the same period, IDLC, Lanka Bangla, and DBH had 1.4 times, 1.2 times, and 1.2 times the growth, respectively.
Moreover, the operating profit of IPDC exhibited a 3.8 times growth with 30.4% CAGR between 2015 and 2020, with operating profit standing at Tk168 crore in 2020.
During the same period, IDLC, Lanka Bangla, and DBH respectively had 1.4 times, 0.8 times, and 1.1 times growth with 6.2%, -4%, and 2.5% CAGR in operating profits.
On Tuesday at the Dhaka Stock Exchange (DSE), IPDC Finance’s shares closed at Tk27.50.
The company was listed on the DSE in 2006. Its paid-up capital is Tk371.09 crore.
Sponsors and directors of the company hold 48.04% shares, the government holds 21.88%, institutional investors hold 16.26%, foreign investors hold 2.80%, and general investors hold 11.02% of the shares.