During 2018, the company’s total loan book increased by 17.39% and now stands at BDT 83.9bn. NPLs reduced to 2.20% from 2.77% in the previous year, reflecting an improvement in portfolio quality. A total of 5,803 new loan clients were booked during the year and Net Interest Income grew by 5.71% to BDT 4.22bn.
Business segment-wise, SME loan book grew by 12.43% during the year to BDT 34.69bn, up from BDT 30.85bn in the previous year. SME now comprises of 42.09% of the company’s total standalone loan book. The consumer portfolio - which comprises of Home Loans, Car Loans and Personal Loans - grew by 15.20% during 2018 to reach BDT 27.82bn. It now contributes 33.76% of the lending basket. The company’s Corporate loan division has posted a year on year growth of 37.88% to reach a portfolio of BDT 19.90bn.
On a standalone basis, IDLC Finance Limited maintained its prior level of Net Profit after Tax with a small growth rate of 1%. However, on a consolidated basis, the company posted a 5% decline in NPAT over the previous year, reporting an amount of BDT 2,171mn. This has been mainly caused by lower profits from subsidiaries. Earnings per share stands at BDT 5.76 as against BDT 6.13 at the end of 2017. ROE and ROA have been 16.55% and 2.12% against 21.15% and 2.60% respectively in the equivalent prior period. Book value per share rose to BDT 36.17, from BDT 33.41 at the close of 2017.
Arif Khan, CEO & Managing Director of IDLC Finance Limited addressed the year’s performance saying, “IDLC’s standalone net profit grew very marginally by 1%. However, given the market conditions, it is noteworthy to mention a few takeaways from our group’s overall performance this year. In spite of a 7.26% decline in Operating Income, mainly resulting from reduced Investment Income and Brokerage Fees, we have been able to restrict our Cost to Income ratio to less than 40%, thanks to numerous process efficiency measures we have been adopting proactively. Our superior treasury management enabled us to continue the growth trajectory of our disbursements even at times when overall market liquidity conditions were comparatively dry, reflecting on the strength of our Balance Sheet. Net Profits of IDLC’s 3 subsidiaries show de-growth following extraordinary results in 2017. However, in 2018, the broad Index fell by 13.8% (following a 24.0% positive return in 2017), DSE 30 – the index for Blue Chip companies – fell by 17.6% (26.1% positive return in 2017) and average daily turnover in the major stock exchange dropped by 37% compared to the previous year. Yet, our subsidiaries have shown great resilience and have outperformed the market as well as many of their peers.”
Khan further added, “Our bread and butter relies on our ability to deliver value to the SME, Consumer, Corporate and Capital Market customers. While we have been proving this in the competitive marketplace, we must continue to move quickly to new arenas in order to stay one step ahead of the curve and continue to generate profitable results for our investors. On that note, we have taken steps to enhance our scalability so that we may serve clients at more granular levels on the lending and wealth management sides. To further diversify our income mix, we are preparing heavily to pave way for greater fee based businesses through Structured Finance, Advisory Services, Investment Banking, Alternate Investments and Fund Management services. We remain committed towards ensuring a sustainable future and will make the necessary investments in new ventures which will bear fruits in the long run. We are confident that we can bring in superior results, not only for our investors, but for the society at large.”