IPDC Finance posts highest ever half-yearly profits as balance sheet expands

IPDC Finance Ltd has posted its highest ever half-yearly profits in the first half of 2021 with over Tk100 crore in operating profits which yielded the non-bank financial institution (NBFI) Tk41 crore in net profits.

Its operational and net profit in the first half of this year is 50% and 30% higher respectively compared to the same period of the last year. 

"It was our commitment to stay beside our clients at any situation, that boosted our loan books to over Tk6,200 crore at the end of June," said Mominul Islam, managing director and chief executive officer (CEO) of IPDC Finance.

An efficient and diversified business model on top of the existing financial strength helped the NBFI secure a robust bottom line, he said. 

IPDC's clients, mostly small and medium businesses, has been in need of financing supports amid the turbulent business environment due to the pandemic and supporting them had been the key focus of IPDC over the first half of the year, he added. 

Over the January-June period, IPDC's credit portfolio grew by 15.7% against customer deposit growth of 4.1%.

Through outgrowing deposits against loan disbursement a year ago, IPDC got prepared to lend aggressively this year.

"But, we have more than adequate preparation to absorb any shock better than our competitors if clients' ability to pay back hurt by the pandemic," said the IPDC CEO.

The lender has already has set aside Tk68 crore as additional provisions against any loan default risks on top of what the central bank demands, despite the fact they already have brought down their non-performing loan ratio to 1.12%, which is the lowest among the listed NBFIs with diversified businesses.

To best prepare for lending, IPDC had set aside more than 96% of the 2020 bottom line, said Mominul Islam. 

"It is time to serve aggressively and the IPDC team is exactly doing the same, being it while disbursing stimulus loans or our existing loans," he said. 

Clients had been enjoying a moratorium and still, there are some cushions for the affected clients, as the central bank dictated.

IPDC, the first NBFI of the country, has significantly diversified its business in SME and Retail, away from the focus on corporate lending once. Also reducing dependency on banks for credit lines, the NBFI is more comfortable with public deposits.

Since the end of 2016, IPDCs loan books grew 3.2 times securing a compound annual growth rate of nearly 30%. Over the period its SME portfolio grew 6.6 times while retail loans grew 4.7 times and the share of corporate loans significantly dropped to 48% of the total from 70 at the end of 2016.

Affordable home loans, SME loans, innovative supply chain finance, and a special focus on women empowerment has been at the heart of IPDC's new journey since the world's largest non-governmental organisation Brac and allies joined its board.

According to IPDC, the company serves over half of the supply chain financing market of the country.