GSP Finance Company (Bangladesh) reported a loss of Tk 667 million for the nine months through September this year owing to a drop in interest income while interest expenses soared.
The non-bank financial institution (NBFI) made a profit of Tk 98.84 million in the same period a year before, according to a stock exchange filing on Wednesday.
The consolidated earnings per share (EPS) stood at Tk 4.25 in the negative for January-September this year, against a positive value of Tk 0.63 for the same period last year.
An official of the company, requesting not to be named, said interest income, investment income, and commissions from exchange and brokerage had fallen significantly but interest payment jumped, leading to losses.
The company has been suffering losses for the past four consecutive quarters to September this year due to a drastic fall in interest income from loans while interest expenses on borrowings and deposits rose significantly.
GSP Finance’s interest income tumbled 69 per cent year-on-year to Tk 172 million while interest payment rose more than 17 per cent to Tk 295.88 million during the nine-month period.
Income from commission, exchange, and brokerage also declined. As a result, the company faced an operating loss of Tk 54.67 million in the nine months to September this year.
The stock market is one of the major sources of income for non-bank financial institutions, and so the stagnant market impacted their earnings.
Due to a bearish market for more than a year, GSP Finance’s net investment income plunged 47 per cent to Tk 12.86 million.
The company failed to generate expected capital gains, said the official.
Moreover, provision for leases, loans, advances, and investments increased 260 per cent year-on-year to Tk 550 million in January-September.
The company incurred annual losses worth more than Tk 170 million in 2022. It did not declare any dividend for the year.
According to its auditor, GSP Finance has investments in term deposit receipts (TDR) amounting to Tk 138.70 million and Tk 13.57 million in Premier Leasing & Finance and FAS Finance & Investment respectively.
The company has not received any interest on these investments in the past two financial years. That exposed the company to considerable financial risk as both the companies are non-performing.
Listed in 2021, the stock has remained stuck at the floor price — Tk 30.30 – for more than a year.