Prime Finance declares dividend after 4 years

Prime Finance and Investment Limited has recommended a 2% cash dividend for the year that ended on December 31, 2019.

The non-banking financial institution recently declared the dividend after four years.

Prime Finance's share price soared by 100% in the last two months at the Dhaka Stock Exchange (DSE). The closing price of the company's each share was Tk12.20 on Thursday.

The company is now in the "Z" category as a poor performer in the DSE.

A senior official of Prime Finance said the company declared the dividend for general shareholders which requires the Bangladesh Bank's approval.  And the sponsors and directors will not take it.

For the final approval of the dividend, the company will hold an annual general meeting (AGM) on November 26 this year through a digital platform. The date of record will be October 22 for the AGM and approval.

In the last financial year, the company reported consolidated earnings per share of Tk0.19, which was Tk0.22 in the previous year.

For the 2014 financial year, the company paid 12.50% cash dividend. But after that, it failed to pay any dividend due to repeated losses.

"The company could not make a profit from 2015 to 2017 due to adverse impact of non-performing loans. After receiving the policy support of the central bank, the company could make a profit in the last two years," the same official said.

However, the company's reserve and surplus are still negative of Tk34 crore, according to the DSE.

Equity researchers of several merchant banks said most of the non-banking financial institutions are in a bad shape now. So investors will be cautious about investing their money in these companies. 

And Prime Finance again faced losses in the first half of this year. The company posted a consolidated loss per share of Tk0.09 during this time.

At the end of June 30, 2020, the consolidated net asset value per share of the company stood at Tk8.85.

Prime Finance was listed on the DSE in 2005, and its paid-up capital is Tk272.91 crore.

The sponsors and directors jointly had 59.14% stake in the company, institutional investors 11.79%, foreign investors 0.01%, and general investors 29.06% on August 31, 2020.