bKash returns to profit on higher finance income

Bangladesh's largest mobile financial service company bKash returned to profit in 2022 on the back of higher net finance income, snapping a three-year losing streak.  

Its profit stood at Tk 17.21 crore last year. The MFS provider incurred losses of Tk 123 crore in 2021, Tk 67 crore in 2020, and Tk 63 crore in 2019, according to the financial reports of the company.

bKash provides various financial services through mobile phones to its customers under a payment services provider licence issued by the Bangladesh Bank.

"There are times when technology companies have to invest to improve products, services and technologies. They also need to spend on campaigns. We did the same. So, we incurred losses in those years," said Shamsuddin Haider Dalim, head of corporate communications of bKash.

"Our investors knew that the investment would give them a return. Now, the return has started to flow in."

The Brac Bank subsidiary's revenue grew 22.7 per cent year-on-year to Tk 3,430 crore, according to the financial report. Operating and administrative expenses increased 25 per cent to Tk 733 crore.

The MFS provider's operating loss stood at Tk 76 crore in 2022, down from Tk 159 crore in 2021. It was the surge in the net finance income that helped bKash return to profit.

The net finance income surged 1,646 per cent to Tk 121.41 crore last year. It was Tk 6.95 crore in 2021, Tk 51 crore in 2020 and Tk 82 crore in 2019.

The finance income includes mainly interest on deposits with banks and non-banks.

In 2022, bKash's e-money circulation soared around 17 per cent to Tk 6,830 crore, up from the previous year's Tk 5,853 crore, according to the financial statements.

The company plans to spend Tk 87.6 crore in capital expenditure in 2023, up from Tk 15.6 crore in the previous year.

Brac Bank holds a 51 per cent stake in bKash while Money in Motion LLC of the US has a 16.45 per cent stake, Alipay Singapore E-Commerce controls a 14.87 per cent stake, the International Finance Corporation holds a 10.36 per cent share, and SVF II BEAM (DE) LLC holds a 7.32 per cent stake.

The Bill & Melinda Gates Foundation, Alipay and SoftBank hold non-voting preference shares.

bKash is the largest MFS operator in Bangladesh with 6.8 crore subscribers.

There are 19.67 crore MFS users in a population of about 17 crore with many owing multiple accounts.