ILFSL sinking under soaring bad loans

International Leasing and Financial Services Limited (ILFSL) has become a sinking ship as its earnings continue to worsen due to bad loans.

As a result, the company has failed to offer any dividend for its shareholders for the first time, at least in a decade.

ILFSL’s consolidated earnings per share sank to negative Tk 126.36 for the year ended on December 31, 2019 against Tk 0.51 positive just a year ago. Net asset value per share also went into negative territory for the reported year.

The company also informed that net profit after tax has declined by over Tk 2,813 crore compared to that of a year ago.

A sharp decline in interest income – by nearly Tk 757 crore – and provision for leases, loans and advances of Tk 759 crore have been identified as the prime reasons for this fall.

On the other hand, interest expense has been on a rise due to an increase in the cost of fund, it said in a statement posted on Dhaka Stock Exchange website on Thursday.

The financial health of the company deteriorated badly since 2016 when PK Haldar purchased huge number of shares from the capital market to strengthen his control over the ILFSL.

He allegedly embezzled over Tk 1,600 crore from the company by opening three dozen loan accounts in the name of four directors of ILFSL. Also, Haldar appointed relatives both at the board and management positions.

Later, Haldar fled the country and settled in Canada. He is a former managing director of NRB Global Bank and Reliance Finance.