First Finance’s accumulated loss rises to Tk554 crore

First Finance, a non-bank financial institution (NBFI), has plummeted into substantial losses, recording an accumulated loss of Tk554 crore at the end of March this year, according to the financial statements of the company. 

The NBFI disclosed its financial statements for the year 2023 and the January-March quarter of this year through the Dhaka Stock Exchange (DSE) yesterday.

The company’s shares fell by over 8% to Tk3.40 on the DSE yesterday, as the NBFI reported the loss and could not recommend dividends to shareholders for the past year.

According to the first quarter’s un-audited financial statement of this year, it incurred a loss of Tk23 crore and the loss per share was Tk1.94, which was slightly higher than the previous year at the same time.

The company showed some improvement in 2023, with a 76% decrease in net loss to Tk40 crore compared to the previous year.

Masud Hossain Khan, acting chairman of First Finance, told TBS, “We are trying to save the company by overcoming the challenges, intending to pay back a better return to the investors in the future. And finally, we could post a profit in the October-December quarter of last year, indicating that our joint efforts are in the right direction.”

In July 2023, the Bangladesh Securities and Exchange Commission (BSEC) reconstructed the First Finance’s board.

The regulatory intervention came as a consequence of the company’s poor performance in business and also in the secondary stock market.

Of every Tk100 loan disbursed by First Finance, over Tk86 was stuck as non-performing loans, and the problem spilled over to all its financial indicators — piling up losses, shareholder equity erosion, and years of no dividend, according to the BSEC.

Starting as a leasing company in 1999 and going public in 2003, First Finance grew its paid-up capital to over Tk118 crore.

Its shareholders got no cash dividends for 15 years in a row, and it has been a Z-category company in the bourses since 2016 due to no cash or stock dividends. Since then, increasing recognition of bad loans has not allowed the company to show a profit except for the year 2019.

The 2% stock dividend it announced in 2019 but the BSEC ruled that it a violation of rules.