IDLC Finance, the country’s largest non-bank financial institution, posted its highest profit yet in its 35-year history in 2020, in what can be viewed as quite the feat amid the pandemic and at a time when the entire sector is reeling.
The NBFI -- which offers home, construction, car and personal loan, brokerage services, investment banking services, small and medium enterprise financing and internet trading --logged in a profit of Tk 254.1 crore for its 2020 financial year, which runs from January to December, up 49.5 per cent from a year earlier.
“I am ecstatic as the 49 per cent profit growth came in a difficult year,” Arif Khan, managing director and chief executive officer of IDLC Finance, told Dhaka Tribune yesterday.
At the end of the third quarter of 2020, the 33 NBFIs’ bad loans stood at Tk 10,245 crore, up 49.8 per cent from a year earlier, according to data from the Bangladesh Bank.
During the course of the year, the NBFI strengthened its cash flow, which is the net amount of cash and cash-equivalents being transferred into and out of a business.
At the most fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows.
Positive cash flows indicate that a company is adding to its cash reserves, allowing it to reinvest in the company, pay out money to shareholders or settle future debt payments.
At the end of 2020, IDLC’s net operating cash flow per share -- which is all cash generated by its main business activities -- stood at Tk 9.05, in contrast to Tk 4.87 in the negative a year earlier.
Subsequently, the company announced a 35 per cent cash dividend for the year, which is the same as in the previous two years.
“I am thankful to all IDLC employees for their rigorous effort during the tough days, our customers for their trust in us, and the board of directors for their constant guidance,” Khan added.
Shares of IDLC Finance, which got listed in 1992, gained 41.2 per cent in 2020. Yesterday, they closed at Tk 70, down about 1.3 per cent from the previous session.
IDLC was established in 1985 through the collaboration ofthe International Finance Corporation, the private sector arm of the World Bank Group; German Investment and Development Company (DEG); Kookmin Bank and Korean Development Leasing Corporation of South Korea; the Aga Khan Fund for Economic Development; City Bank; IPDC; and Sadharan Bima Corporation.
As the company evolved, the initial foreign shareholding of 49 per cent was gradually withdrawn and the last foreign shareholding was bought out by local sponsors in 2009.
