The earnings of most of the non-bank financial institutions (NBFIs) plummeted in the first half (H1) of the current calendar year compared to the same period a year ago.
According to the un-audited financial statements for the period of January-June 2018, the consolidated earnings per share (EPS) of the 18 NBFIs out of 23 declined.
EPS is the portion of a company's profit allocated to each outstanding share of common stock. In short, it serves as an indicator of a company's profitability.
The EPS of Bay Leasing, BD Finance, BIFC, Fareast Finance, FAS Finance, First Finance, GSP Finance, ICB, IDLC Finance, Islamic Finance, LankaBangla Finance, Midas Financing, National Housing Finance, Phoenix Finance, Peoples Leasing, Premier Leasing, Prime Finance and United Finance plummeted in the H1.
On the other hand, the EPS of Delta Brac Housing Finance, International Leasing Finance, IPDC Finance, Union Capital and Uttara Finance increased in the H1.
Market operators said lack of new investments, thanks to a liquidity shortage, cast a gloom over the NBFIs in the first six months (January-June) of the current calendar year.
"Most of the NBFIs could not borrow from the banking sector as per their demand and hence the decline in their earning per share," said a leading broker, preferring anonymity.
The higher provisioning requirements due to non-performing loans and losses from capital market investments, he said, ate into the profits of the NBFIs.
The stock market was a major source of income for the financial institutions. But almost all the NBFIs incurred losses from stock investments due to the market decline, said the stockbroker.
DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), plunged 839 points, or 13 per cent in the first six months (January-June) of the year.
The financial institutions sector also witnessed a substantial fall in its share prices and market capitalisation in the first six months of the year due to investors' lack of confidence in the market.