bKash narrows half-yearly losses

The country's leading mobile financial service (MFS) provider bKash has narrowed its financial losses by 41% in the first half of the year riding on its nine times higher net finance income.

At the end of June 2022, its net loss stood at Tk42.46 crore, down from Tk71.99 crore in the same period of the previous year.

Its net finance income, which mainly comes from fixed deposits, stood at Tk59.49 crore, which was only Tk5.87 crore a year ago.

Currently, its fixed deposit is Tk1,839 crore, a slight increase from the previous year.

When contacted for details about the significant variations of net finance income, a bKash official asked this correspondent to email his queries and wait a day for answers.

According to the company's financials, bKash has been sustaining losses since 2019.

bKash officials were saying earlier, that the company was spending quite a lot in its effort of expanding overall business and adding new services, which is a contributing factor in the amount of loss it has suffered.

During the first half of this year, its gross profit was Tk413.85 crore, which was 32% higher than the previous year at the same time. But it spent Tk502 crore for operating, administrative, and commercial purposes, which caused the company to count big losses.

While 12 MFS providers are operating in the country, only two or three are dominating the sector with bKash leading from the front, both in terms of services and scope of operation.

Although bKash, which was established in 2011, was profitable from the beginning, it has not seen any profit after 2018.

A brokerage firm's analyst said the competition in this sector increased since the arrival of the MFS "Nagad" in 2019. So bKash invests more to enhance client service. Even if the company is currently incurring losses, it will reap the benefits of the investment.

According to data from the Bangladesh Bank, an average of Tk2,095 crore was transacted through mobile banking services every day in May. At the end of May, the number of registered customers of mobile banking stood at 11.26 crore.

Brac Bank holds 51% shares of bKash while Money in Motion LLC of the US has 16.45%, Alipay Singapore E-Commerce 14.87%, International Finance Corporation 10.36%, and SVF II BEAM (DE) LLC 7.32%.