Union Capital liabilities exceed assets


NBFI incurs a loss of over Tk 1.43 billion in 2021

Union Capital, a listed non-banking financial institution, suffered a net loss of over Tka 1.43 billion in the financial year ended December 31, 2021, while the company’s unallocated loss was to almost 2.90 billion taka.

The total liabilities of the non-banking financial institution exceeded its total assets by 722.16 million taka, according to its auditor’s report published on the Dhaka Stock Exchange (DSE) website on Thursday.

Its financial statements showed a net asset value per share (NAV) of negative Tk 4.18, earnings per share (EPS) of negative Tk 8.32 and a capital adequacy ratio (CAR) of 3.05% also negative respectively.

“We performed audit procedures to assess management’s assumptions about the company’s ability to continue as a going concern,” the report said.

Referring to Bangladesh Bank regulations, the regulatory capital (base capital and additional capital) should have been kept at around Tk 1.69 billion.

However, the eligible capital of the company is Tk 515.16 million in negative.

“We draw attention to the respective note which indicated fixed deposits with Bangladesh Industrial Finance Company and International Leasing and Financial Services.”

The company noted that consolidated EPS decreased due to higher provisioning requirements due to higher non-performing loans, lower interest income resulting from no new disbursement and decrease in other operating income.

The NAV for 2021 has been reduced from the previous year due to a loss of around 1.43 billion taka in 2021 and the main reasons for this loss are the additional provision needed for the increase in NPLs and lower interest income, the company said.

Union Capital, which was listed on the DSE in 2007, has not declared dividends for three consecutive years – 2019, 2020 and 2021.

The company last paid a 5.0% stock dividend in 2018.

Following the news, its share price fell 2.56% to close at Tk 7.60 each on Thursday, well below face value.

Its shares traded between Tk 6.30 and Tk 16.20 last year.

Its paid-up capital is Tk 1.72 billion and its authorized capital is Tk 2.0 billion, while the total number of shares is 172.57 million.

The sponsor-directors hold 35.20% of the company’s capital, the institutes 16.35% and the general public 48.45% as of March 31, 2022.

The financial situation of some listed NBFIs has also deteriorated recently.

Meanwhile, trading in People’s Leasing & Financial Services shares had been suspended for nearly three years since July 14, 2019, due to its deteriorating financial health over the past few years.

[email protected]


Comments are closed.