Provision shortfall adjustment leads Premier Leasing to extensive loss

Premier Leasing & Finance Limited — a third-generation financial institution — incurred extensive loss in 2020 because of its adjustment of provision shortfall since 2015.

As per the data available on the Dhaka Stock Exchange (DSE), the company made profits in the past five years. 

But after the management adjusted the provision shortfall against loans, leases, and advances in the year 2020, the company posted a loss of Tk38.96 crore despite being in a profitable state in the first nine months.

In the January to September period, its net profit was Tk1.48 crore.

According to a disclosure of the company on the DSE website on Wednesday, its consolidated EPS decreased from the previous year also because of the negative impact of Covid-19 on the business as well as the adjustment of the provision shortfall amount.

The company's annual general meeting (AGM) will be held on 30 December through a digital platform. The record date for the AGM will be 14 December.

In 2019, although Premier Leasing made Tk2.24 crore in profits, it did not pay any dividend to its shareholders.

Also, owing to the loss in 2020, the company will not pay any dividend to its shareholders for this year.

In 2020, the company's loss per share stood at Tk2.93 which was Tk0.17 earnings per share a year ago.

Subash Chandra Moulick, company secretary of Premier Leasing told The Business Standard, "Losses deepened due to the provision shortfall adjustment by the management since 2015."

"It's not a loss if the non-performing loan (NPL) goes down. It will add to the profit again. The total loan disbursement of the company stood at Tk1,298 crore, in which the NPL is above 40%," he added.

According to the company's financial statements, its consolidated net asset value per share stood at Tk16.03 in 2020, which was Tk18.96 in the previous year, and consolidated net operating cash flow per share Tk3.26, compared to Tk3.08 previous year.