Despite high inflation, leading non-bank financial institutions (NBFIs) in Bangladesh reported higher Q2 2023 profits due to a wider interest spread, which rose to 2.92% in May from 0.37% a year earlier after the removal of the lending rate cap and SMART reference rate. United Finance saw a 455% profit increase to Tk 29.46 million, with significant rises in net interest and investment income. IPDC Finance’s earnings grew 6.25% to Tk 85 million, driven by a 22% rise in interest income and a 142% increase in investment income. DBH Finance’s profit rose 3.4% to Tk 236 million, and IDLC Finance posted Tk 398 million, a 5.3% increase. Conversely, many NBFIs faced high non-performing loans (NPLs), liquidity crises, and shrinking interest margins, with the overall NPL ratio reaching 30% in March. Scam-hit institutions like People’s Leasing struggle with repayment issues, affecting the sector’s image, leading to 15 of 23 listed NBFIs trading below face value on the Dhaka Stock Exchange.
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