Equity Coverage on IDLC Finance Limited
IDLC Finance Limited is the largest multi-product, multi-segment Non-Banking Financial Institution (NBFI) in Bangladesh. As one of the most respected financial brands in the industry, IDLC holds a strong and diversified footing in Corporate, SME, Retail and Capital Market segments.
IDLC holds the third highest market capitalization in the listed NBFI industry (BDT 19,330 million). Its share price inched down 22.9% (YoY) in 2022, because of a challenging capital market environment characterized by pandemic–induced volatility. Share price went dry due to the regulatory floor price impact followed by the global geopolitical and economic crises. IDLC is amongst the largest NBFI in Bangladesh in terms of total assets, and total outstanding loans which stood at BDT 148,185 million, and 106,437 million respectively at the end of 2022. As of December 2022, the credit segment holds 71.8% of total assets. IDLC distributed its credit portfolio to agriculture loan (8.1%), textile and apparels (22.4%), food and beverage (4.0%), pharmaceuticals (2.1%), leather & leather products (0.3%), power and energy (1.3%), real estate & home appliances (35.1%), IT & services (3.4%), transportation (6.8%), and rest of 16.3% other industries at the end of December 2022.
The total classified loan is stood at BDT 4,374 million, NPL stood at only 3.8% as against the total industry average 23.8% in 2022. Recently, Bangladesh Bank (BB) has approved to launch the Islamic Shariah-based financing business in IDLC under the Islamic finance window.
Return on Assets (ROA) and Return on Equity (ROE) of IDLC are decreasing over the years. In FY-22, ROA and ROE stood at 1.3% and 10.6%, respectively, which was 2.0% and 15.9% in FY-18.
In HY23, IDLC reported BDT 722 million earnings which was 21.4% lower than the previous period. EPS and NAV per share stood at BDT 1.74 and BDT 43.80 respectively in HY-23.