IPDC became a maverick NBFI in 2019
IPDC, the country's first private sector non-banking financial institution, swam against the tide in 2019.
Its profits soared 25 % 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 % cash and 5 per cent stock dividend for the year.
IPDC's earnings rose 15.5 % to Tk 216.6 crore because of 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 as a result of tightening liquidity situation.
"We've reshaped our business in 2015 and today 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 1.57 % in 2019 from 2.14 % in 2018.
Islam simply credits it to IPDC's astute lending practices.
For example, IPDC gave mortgage loans beyond Dhaka and Chattogram City, that your others hesitate to accomplish.
It introduced a nationwide home loan product named Bhalo Basha this past year.
In addition, it gave loans to supply chains and block chains.
Subsequently, the NBFI's loans, advances and lease expanded 14.4 % to Tk 5,072 crore, making its portfolio the 3rd largest amongst the NBFIs.
"We were forward-looking. IPDC gave loans predicated on people, brand and technology, so our profits are rising and default loans were reigned in, too."
When the complete NBFI industry's deposit growth became negative, IPDC's deposits escalated 25 % to Tk 4,636 crore in 2019.
The business also got rest from the bearish currency markets since it largely refrained from buying the market.
Of its total investment of Tk 157 crore in bonds and equities, almost none were in listed stocks; it poured profit 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 originated from investment income which investment is mainly in non-listed preference shares.
"The year 2020 is totally different and abnormal for all, so we will attempt to make sure you continue to support the entrepreneurs," said Islam, also the chairman of Bangladesh Leasing and BOAT LOAN COMPANIES Association.
If the coronavirus situation could be suppressed this month, IPDC's profits will never be influenced much, he added.
IPDC's stocks traded at Tk 22.60 on March 25, the last day of trading before the bourses shuttered good countrywide general shutdown.
The federal government holds 21.88 % shares in IPDC, institutional investors 18.98 %, foreign investors 2.88 %, retail shareholders 8.22 % and sponsor-directors the rest.
