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IDLC Finance’s Witness 20% Surge in Classified Loans

Industry: Financial, NBFI
Company: IDLC Finance Limited
Company Intelligence Tag: Business Insights

IDLC Finance Limited, a publicly listed non-bank financial institution (NBFI), has experienced a 20% year-on-year increase in classified loans during the January to March quarter of 2023. Classified loans refer to loans that are at risk of being defaulted. The total amount of classified loans for IDLC Finance in the quarter was Tk524.36 crore, accounting for 4.72% of its total loan portfolio, including subsidiaries.

The company has observed a consistent rise in classified loans since 2021, as stated in its financial statements. In 2022, the non-performing loans of the company reached Tk437.41 crore, marking a 60% increase compared to the previous year. The withdrawal of the deferral facility for loan installment payments by the central bank has contributed to the increase in classified loans. Economic uncertainties, inflation, and liquidity problems have also led to a rise in new loan defaults. In the first quarter of 2023, IDLC Finance reported a nearly 28% year-on-year decrease in net profit to Tk34.40 crore, primarily due to a decline in net interest income and a sluggish stock market.

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