Most of the merchant banks made profit last year after remaining in losing state since the market crash in 2010-11 despite the sluggish market trend, a BSEC report showed.
Of the 38 merchant banks operating their own portfolio investment in the capital market, 27 made Tk 211.72-crore profits in 2013 and seven others registered Tk 39.72-crore losses, while four entities’ profit-loss remained in parity, a BSEC report showed.
The key index of the Dhaka Stock Exchange, DSEX, remained almost at the same position despite enlistment of 17 new companies and mutual fund at the bourse.
As per the BSEC report, Southeast Bank Capital Services Limited made the highest profit among all merchant banks with Tk 27.19-crore unrealised gain in their own portfolio investments.
‘After incurring losses in 2011-2012 we have managed to make some profits in the last financial year on our own portfolio investors. But, we are yet to recover the losses we incurred in the previous two years,’ Southeast Bank Capital Management assistant vice-president Alomgir Hossain told New Age on Friday.
‘On the other hand, as the market situation remained unchanged and our clients are yet to recover from losses, recovery of margin loans became the major concern of our organisation as we are yet to realise significant amount of margin loans from our clients.’
Another official of a merchant bank said, ‘Low daily turnover and recovery of margin loans from our clients remained the main concern of our organisation as the number is much higher then we managed to make profit in the previous year.’
He also said that due to some unfriendly policy adopted by the merchant banks they were facing obstacle in increasing their profits.
ICB Capital Management stands second among the merchant banks with Tk 19.74 crore profits while Janata Capital and Investment with Tk 19.08 crore, Uttara Finance and Investments with Tk 18.84 crore, Prime Finance Capital Management with Tk 17.91 crore, BRAC EPL Investment with Tk 17.43 crore, Prime Bank Investments with Tk 14.52 crore, EC Securities with Tk 13.45 crore, SBL Capital Management with Tk 12.48 crore, Agrani Equity and Investment with 10.92 crore, GSP Finance Company (Bangladesh) with Tk 9.03 crore and Jamuna Bank Capital Management with Tk 9.01 crore followed the chart.
On the other hand, IDLC Investments registered the highest Tk 21.32-crore losses in 2013. The other merchant banks that incurred significant losses in their own portfolio investments were Sonali Investment (Tk 13.88 crore), PLFS Investments (Tk 2.92 crore), AFC Capital (Tk 0.62 crore), Business and Management (Tk 0.40 crore), Alliance Financial Services (Tk 0.36 crore) and NBL Capital (Tk 0.22 crore).
Union Capital, Trust Bank Investment, RACE Portfolio and Issue Management Limited and BLI Capital’s profit-loss remained in parity.
According to other BSEC data, the total outstanding margin loan of 38 merchant banks to its clients stands at around Tk 7740.37 crore as of April this year.