Despite a surge in interest income, DBH Finance experienced a 22.35 per cent year-on-year decline in profit, to Tk 251.22 million, in July-September (Q3).
A significant fall in investment income and provisions for unrealised losses in securities investment led to the erosion in earnings.
The company endured a 75.8 per cent decline in investment income in the quarter to September, compared with the corresponding period a year ago.
The chief financial officer of DBH Finance, Abdul Ahad, said a decline in the interest rates of Treasury bonds and Treasury bills dragged down investment income in Q3 compared with the same quarter of the previous year.
The amount of investment also declined in Q3 this year compared with the previous year.
As a result, income from investments fell to Tk 83.83 million in Q3 this year from Tk 345.31 million in the same quarter last year.
However, the company’s net interest income rose significantly in the quarter to September as interest paid on deposits and borrowing declined during the quarter.
High interest income could not offset the loss in investment income.
Besides, the company had to set aside Tk 43.50 million as a provision in July-September this year for unrealised losses on securities in its portfolio. A year ago, it had a net provision reversal of Tk 21.68 million in the same quarter. That means money set aside earlier was released and added to profit, as the market was rising at the time.
Hence, earnings in Q3 2025 were elevated by the reversed provision. On the other hand, income in the third quarter this year suffered downward pressure from the required provision.
Higher tax expenses also weighed on profitability in Q3 this year.
The company’s financial performance in the nine months to September appears brighter, with improved profitability supported by strong net interest income growth and effective portfolio optimisation.
The company’s profit advanced 8.58 per cent year-on-year to Tk 807.68 million in the nine months to September.
Investment income plunged 55 per cent year-on-year in the nine months. Despite that, the company was able to register 3.49 per cent year-on-year growth in operating income during January-September.
The achievement was primarily driven by a substantial improvement in net interest income.
Net interest income surged 57.44 per cent to Tk 1.58 billion in the first nine months of 2026 from the corresponding period of the previous year, supported by higher interest income on money lent and lower interest expenses on deposits and borrowings.
This increase largely offset the reduction in investment income.
Also, lower provisions played a vital role in the bottom-line growth in January-September this year.
The company’s net operating cash flow per share deteriorated from Tk 17.36 in January-September last year to negative Tk 4.51 in the same period this year.
The cash flow turned negative primarily due to liability management activities and lower customer deposits, which reduced cash inflows from the company’s core banking operations.
The company’s net asset value (NAV) per share strengthened to Tk 52.03 as of September this year, compared with Tk 49.55 at the end of December last year.
That indicates growth in the company’s net asset value relative to its outstanding shares, supported by retained earnings and overall profitability.
Meanwhile, the stock price of DBH Finance increased to Tk 44.40 by August 18 from Tk 37.3 on May 24.
Later, the stock exhibited a falling trend amid a weak recovery and finally closed at Tk 39.20 on Wednesday, a 0.76 per cent decline from the previous session.
https://thefinancialexpress.com.bd/stock/dbh-finances-q3-profit-down-22pc-due-to-provision-lower-investment-income