LankaBangla Finance: New subsidiary in the offing

FE Report

LankaBangla Finance Limited, a leading non-banking financial institution (NBFI) is going to launch ‘LankaBangla Investments Ltd’, a new subsidiary aiming to strengthen the merchant banking.

“We hope our new subsidiary will be opened by August to give a thrust on merchant banking with a professional outlook,” Mafizuddin Sarker, managing director of LankaBangla Finance Ltd told the FE in an interview recently.

He said the listing process of LankaBangla Securities, another subsidiary of LankaBangla Finance is also progressing.

LankaBangla Securities remains the top broker of the country during the last few years.

Mr Mafiz said his company is working hard to expand the secondary bond market.

LankaBangla Finance is one of the recipients of license awarded by Bangladesh Bank to act as primary dealer (PD).

“But our efforts will not be fruitful unless the government allows a transparent policy on taxation against the income of bonds,” Mr Mafiz clarified.

He mentioned that at present the policy on bonds of Bangladesh is not conducive like the policies of neighbouring countries.

He further added that the central bank should not allow participation of non-licensee FIs at the Bangladesh Bank auction.

Emphasising the need for developing the bond market, he said mobilization of internal resources has become a core necessity to reduce the dependence on external resources.

“We have the opportunity to develop bond market, but the chance should not be missed,” he commented.

LankaBangla Finance earned a net profit of Tk 372 million in the first quarter of 2010 against Tk 90 million of the corresponding period of the previous year.

Earnings per share rose to Tk 7.10 (face value Tk 10) against Tk 1.70 during the period.

“Our services in the stock market and home loan areas in 2009 were very good, but we like to further consolidate our position in 2010 also,” Mr Mofiz added.

He said since driving force of the company’s growth is customers’ satisfaction, LankaBangla will strive for proper identification of customers’ needs and quality product and services commensurate with their expectation and requirement.

Explaining another move of 2010, Mr Sarker said to help develop the country’s economy, LankaBangla has established a separate department on SMEs.

“We have already appointed human resources and launched infrastructure network on the separate SME department,” Mr Sarker said.

The company registered a whopping 97.03 per cent increase in its net profit at Tk 744.07 million in 2009 against Tk 377.64 million in 2008.

The company’s paid-up capital during the period stood at Tk 442.75 million.

“The stock market is growing and we are committed to reach our quality service to the door steps of the general investors,” Mr Sarker said.

LankaBangla has been offering diverse financial services including lease, loan, corporate finance, bridge finance, working capital finance, merchant banking, factoring of receivables, home loan, stock market operation and credit card under master card brand.

It also receives deposit from individual and institutions under attractive/flexible/diversified deposit schemes.

He said awareness build-up is an important pre-condition to develop the factoring.

“Awareness must come from the pharmaceutical, tourism and multinational companies to develop the factoring, a new financing tool already developed in Sri Lanka, Thailand and Indonesia,” he added.

Established in late-1996, LankaBangla Finance is a joint venture financial institution established with multinational collaboration of foreign equity investment from Sri Lanka and Kingdom of Saudi Arabia.

The company approved 15 per cent cash and 20 per cent stock dividends for the year 2009 at the 13th annual general meeting (AGM) of the company held recently.

Source: The financial express on 29 June, 2010.

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