IPDC proved to be a maverick NBFI in 2019
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IPDC, the country's first private sector non-banking financial institution, swam against the tide in 2019.
Its profits soared 25 per cent year-on-year to Tk 56 crore in a year when the majority of the NBFIs suffered due to liquidity crunch and were reeling from the repercussions of the liquidation of People's Leasing Financial Services.
Subsequently, it rewarded its shareholders with 10 per cent cash and 5 per cent stock dividend for the year.
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IPDC's revenue rose 15.5 per cent to Tk 216.6 crore thanks to it interest income.
Its net interest income surged 14.4 per cent to Tk 194.3 crore in 2019 although the spread kept decreasing in the sector due to the tightening liquidity situation.
"We have reshaped our business in 2015 and now we are getting the results," said Mominul Islam, Managing Director of IPDC Finance.
In 2019, the banking sector's classified loans hit an all-time high of 12 per cent, while classified loans in NBFIs stood at 10.4 per cent.
However, IPDC saw its classified loan ratio shrink to 1.57 per cent in 2019 from 2.14 per cent in 2018.
Islam simply credits it to IPDC's astute lending practices.
For instance, IPDC gave home loans outside of Dhaka and Chattogram City, which the others hesitate to do.
It introduced a nationwide home loan product named Bhalo Basha last year.
It also gave loans to supply chains and block chains.
Subsequently, the NBFI's loans, advances and lease expanded 14.4 per cent to Tk 5,072 crore, making its portfolio the third largest amongst the NBFIs.
"We were forward-looking. IPDC gave loans based on people, brand and technology, so our profits are rising and default loans were reigned in, too."
When the whole NBFI industry's deposit growth became negative, IPDC's deposits escalated 25 per cent to Tk 4,636 crore in 2019.
The company also got relief from the bearish stock market as it largely refrained from investing in the market.
Of its total investment of Tk 157 crore in bonds and equities, almost none were in listed stocks; it poured money in preference shares of many power generation companies.
In 2019, IPDC non-interest income soared 26.5 per cent to Tk 22.3 crore. The non-interest income came from investment income and this investment is mostly in non-listed preference shares.
"The year 2020 is totally different and abnormal for all, so we will try to make sure to continue to support the entrepreneurs," said Islam, also the chairman of Bangladesh Leasing and Finance Companies Association.
If the coronavirus situation can be suppressed this month, IPDC's profits will not be affected much, he added.
IPDC's stocks traded at Tk 22.60 on March 25, the last day of trading before the bourses shuttered in line with the countrywide general shutdown.
The government holds 21.88 per cent shares in IPDC, institutional investors 18.98 per cent, foreign investors 2.88 per cent, retail shareholders 8.22 per cent and sponsor-directors the rest.
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