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The following Rating of the IIDFC has published by National Credit Rating Limited (ncr), followed Financial Institutions Rating Methodology (Bank & NBFI) of NCR and published in the website:www.ncrbd.com

Ratings are based on Audited Financial Statement up to 31st December 2017 along with the other relevant Quantitative as well as Qualitative information provided by the Client up to date of Rating Declaration.
SURVEILLANCE ENTITY RATING - 2017
Date of Rating Declaration Long Term Short Term
26.06.2018 AA+ (Double A Plus) ST-1
Validity For one year from the date of rating declaration. For one year from the date of rating declaration.
Outlook Stable
SURVEILLANCE ENTITY RATING - 2016
Date of Rating Declaration Long Term Short Term
03.07.2017 AA (Double A) ST-2
RATING RATIONALE
NCR has notched entity rating of Industrial and Infrastructure Development Finance Company Limited one grade up from the previous grade duly considering qualitative factors such as track record of governing body and management team with affluent experience and rich educational background and adequacy of framework, policies and guidelines for risk management, internal control, credit approval, maintenance of regulatory requirements etc. The ratings also favorably consider the increase in gross loan and advances, positive liquidity gap, along with properly maintained provisions for nonperforming loans, diminution in investment value as well as surplus of CRR and SLR, improvement in NIM and spread. The ratings are, however, partly constrained by decline in CAR, decrease in net income and other profitability ratios like ROE and ROA, upward moving non-performing loan. The ratings also take into consideration low interest rate environment and economic expansionary policies taken by the government. NCR, in the view of the company’s recent operational performance and current economic position, considers the outlook of the company as ‘Stable’ indicating that the existing fundamentals may remain unchanged in near future.
ASSESSMENT
The shareholders’ equity of the company on consolidated basis increased by 1.31% and stood at TK 1,763.81 million in 2017 against TK 1,648.75 million in 2016. The total Risk Weighted Asset (RWA) of IIDFCL went up to TK 16,588.47 million in 2017 against TK 14,055.13 million in 2016. Consequently, the company had to maintain minimum capital of TK 1,658.85 million in 2017. The total eligible capital was reported TK 1,816.06 million that included Core Capital (Tier-I) of TK 1,702.55 million and Supplementary Capital (Tier-II) of TK 113.51 million in 2017, representing a capital surplus of TK 157.22 million. Finally the CAR was posted 10.95% which was composed of Core Capital (Tier-I) of 10.26% and Supplementary Capital (Tier-II) of 0.68%.

The consolidated gross lease and advances of IIDFCL increased to TK 16,808.30 million in 2017 from TK 16,441.24 million in 2016. The Non-Performing lease and advances of IIDFCL increased to TK 1,031.00 million in 2017 from TK 688.01 million in 2016. All the categories of non-performing lease and advances i.e., sub-standard, doubtful lease and advances and bad & loss lease and advances increased by 61.30%, 11.87% and 84.87% respectively in 2017. The bad/loss loans & advances of TK 117.35 million was written off in 2017 against TK 158.09 million in 2016. The impaired lending to gross finance of IIDFCL on solo basis decreased to 8.65% in 2017 from 4.73% in 2016. IIDFCL on solo basis maintained provision of TK 442.47 million in 2017 against the provision of TK 377.19 million made in 2016, having excess provisions of TK 9.38 million in 2017 against TK 20.93 million in 2016.

The total net revenue on consolidated basis increased to TK 782.40 million in 2017 from TK 509.76 million in 2016. The Net Interest Income on consolidated basis increased to TK 510.85 million in 2017 from TK 333.87 million in 2016. The fee based income also increased to TK 100.86 million in 2017 from TK 53.21 million in 2016. The improvement in other operating income was mainly derived from realized capital gain of TK 121.93 million in 2017 against TK 23.55 million in 2016. Moreover, interest and dividend income from investing activities stood at TK 13.43 million and TK 35.34 million respectively in 2017 from TK 67.53 million and 31.59 million respectively in 2016.

The cost to total net revenue ratio decreased to 38.89% in 2017 from 51.55% in 2016. ROE and ROA went down to 11.23% and 0.90% in 2017 respectively from 11.66% and 1.03% in 2016 respectively. The net interest margins declining over the last three years and stood at 9.57% in 2017 against 10.18% in 2016. The cost of funds also moved downward and stood at 6.56% in 2017 against 8.30% in 2016. As a consequence, the spreads expanded and stood at 3.00% in 2017 against 1.88% in 2016.

The company maintained TK 205.03 million of Cash Reserve Requirement (CRR) against the required reserve of TK 176.02 million in 2017 which was equivalent to 2.91% of CRR against the required rate of 2.5%. Consequently, the company had a surplus of TK 29.00 million in 2017. IIDFCL also maintained Statutory Liquidity Reserve (SLR) of TK 438.71 million against the required reserve of TK 388.90 million in 2017 which was equivalent to 5.64% of SLR against required rate of 5% during the period ended December 31, 2016. As a consequence, IIDFCL had a surplus of TK 49.81 million in 2017.
PROFILE
Industrial and Infrastructure Development Finance Company Limited (hereinafter called as ‘IIDFCL’ or ‘The Company’ was incorporated on December 19, 2000 as a Public Limited Company. The company was licensed by Bangladesh Bank on January 23, 2001 as a Non-Banking Financial Institution under the Financial Institutions Act, 1993. IIDFCL commenced operation on April 1, 2001. IIDFCL has two subsidiary companies namely IIDFC Securities Limited and IIDFC Capital Limited. IIDFCL’s registered and Corporate Head Office is located at Chamber Building (6th & 7th floor), 122-124 Motijheel C/A, Dhaka-1000. The company operates with six (6) other branch offices.
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