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67	67	The portfolio of services of LankaBangla involves the services of all its five subsidiaries and of the parent company. Over the span of its business, the company has developed service areas which cover almost every corner of the financial services arena.
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69		-== Products of LankaBangla Finance: Corporate financial services division ==
	69	+== Products of LankaBangla Finance: Corporate financial services division  ==
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71	71	LankaBangla Finance provides 360-degree financial service coverage to its clients. The product and service units of LankaBangla are as follows –
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196	196	Internet trading department of the company is charged with facilitating online based trading to all the B/O (beneficiary owner) account holders of LBSL. The company has two trading platforms to this effect – LankaBangla TradeXpress and DSE Mobile app. Recently, the company has switched from DSE Mobile app of Dhaka Stock Exchange to their own platform TradeXpress.
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	198	+[[image:all online products of lankabangla.png||alt="all online products of lankabangla"]]
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	200	+Under the wing of portal services of LankaBangla Securities, the company has launched a platform called iBroker, which can be used for applying to IPO, access portfolio statements and ledger details, and fund requisition requests online.
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	202	+== Products and services of LankaBangla Investments Limited (LBIL) ==
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	204	+LankaBangla Investments Limited is a premier investment bank in the country providing corporate advisory, issue management and portfolio management services. LBIL got registered with RJSCF (Registrar of Joint Stock Companies and Firms) on 29 March, 2010 as a private limited company. The company has inherited the merchant banking operation from its parent company LBFL, which offered the services first in Bangladesh back in 1997. LBIL has placed itself on firm roots by offering investment banking services in primary markets, and portfolio management services. This subsidiary provides following services –
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	206	+* Corporate advisory
	207	+* Bond issuance
	208	+* Alternative financing
	209	+* Mergers and acquisitions
	210	+* Joint advisory services
	211	+* Issue management
	212	+* Underwriting
	213	+
	214	+The company provides ‘Discretionary Portfolio Management’ services to help the investors invest without going through the hassle of keeping update with market information and making day-to-day investment decisions. The company offers three products in this case –
	215	+
	216	+1. AlphaPlus (Investments Best Managed): This product means relaying the investment works to a competent portfolio manager who is attuned with upheavals of the stocks market. Efficient trade execution by LBIL team ensures optimum benefit for the clients.
	217	+1. AlphaPlus INITIAL: This product would collect money from the small investors who can neither go in the secondary market not can they invest in the fixed income securities for the income is too low. Through this product, LBIL collects the investment money and invest in the primary market with minimum risks.
	218	+1. LankaBangla Nishchinto: This is a monthly saving deposit scheme through which the investors can open an account with minimum of BDT 5,000 each month for three years and LBIL would invest the amount in selected Blue-Chip stocks, Mutual Funds and Fixed Income instruments.
	219	+
	220	+== Products and services of LankaBangla Asset Management Company Limited (LBAMCL) ==
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	222	+LankaBangla Asset Management Company Limited (LBAMCL) is the official asset management wing of LankaBangla Group. LBAMCL received its licence from Bangladesh Securities and Exchange Commission (BSEC) to function as an asset management company on June 24, 2012. LankaBangla Finance Limited owns 99.99% share of this company. It has the following products –
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	224	+* Close-end mutual fund operation
	225	+* Open-end mutual fund operation
	226	+* Discretionary portfolio management
	227	+* Islamic Shariah based products
	228	+* Provident fund, pension fund, gratuity fund management
	229	+* Alternative investment management
	230	+* Financial planning services
	231	+
	232	+== Services of LankaBangla Information System Limited (LBiS) ==
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	234	+LBiS has started its journey on May, 2013 as a leading information technology service provider in the country. The company provides following services –
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	236	+1. Virtual Office Dynamics: Based on the concept of ERP, an enterprise re-engineering solution that uses new business computing paradigms to integrate IT processes across company divisions and departments, LBiS has developed a web-based ERP namely Virtual Office Dynamic (VOD). The ERP runs in all the other subsidiaries of LankaBangla Finance Limited.
	237	+1. Market data service: This is a FIX protocol-based server-side engine. This disseminates DSE market data to subscribed FIX clients and clients can feed it to its simulation engines to demonstrate the market. This is a new concept and LBiS is the first to implement it in Bangladesh. In other words, LBiS is the pioneer in this arena.
	238	+1. Project management: This part of service offering aims at helping the small and mid-sized businesses to manage their IT infrastructures and software implementations. The expert team of engineers provides services to the clients in information technology, IT project management, systems analysis and design, and market data service aspects.
	239	+1. Consultancy: It is concerned with providing business analysis, IT audit, IT services, software procurement, and project management.
	240	+1. Cloud services: LBIS cloud service includes Software as a service (Saas), Platform as a service (Paas), Infrastructure as a service (Iaas), Data as a service (Daas) and Backup as a service (Bass).
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	242	+Outsourcing and mobile application development are two other services of LBiS.
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	244	+== BizBangla Media Limited ==
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	246	+This company is 92.5% owned by LankaBangla Securities Limited. The company is charged with the responsibility of publishing the country’s first Bengali daily ‘The Daily Bonik Barta’ since 2011.
	247	+
	248	+= Industry analysis =
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	250	+The financial institutions in Bangladesh faces stiff competition since the country has lax measures in ensuring a stable financial market so far. The country has 34 financial institutions alongside 61 banks. The functionality of banks and financial institutions is different with respect to collecting deposits, foreign exchange operation and issuing checks, as well as different interest rates. Latest from the industry is a liquidation of People’s Leasing and Financial Services (PLFS) in July, 2019 and in June, 2020, Bangladesh Bank issues license to Strategic Finance and Investment Limited (SFIL).
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	252	+The product and service differentiation in the industry is very tough, yet there are many companies fighting for the same market share. The main challenge that a company faces in operating in this highly competitive industry is that there are limited number of fund suppliers, oftentimes limited/unsuitable investment opportunities as well. Rate of inflation after Covid-19 has been very high which rendered the rates offered by banks and NBFIs almost ineffective. For example, the deposit interest rate cap imposed by Bangladesh Bank is 6% maximum. But the latest reported inflation rate is 6.17%, which is 0.17% higher than the maximum offered interest rate. Thereby, people are becoming increasingly less interested in depositing fund with the financial institutions.
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	254	+Interest rate and inflation volatility, non-performing loans remain some of the major challenges in the industry. Piling non-performing loan is a problem for the banking industry in Bangladesh on the one hand, on the other, there is liquidity abundance, which the banks and financial institutions cannot invest in proper channel. Recently, Bangladesh Bank has capped the interest rate charge of the financial institutions to 11% maximum, which is 9% for the banks.
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	256	+Entering the financial market of the country is relatively easy, since the government or the central bank in Bangladesh kept the licensing procedure somewhat relaxed. In the last two years, the central bank licensed three private commercial banks and one non-bank financial institution. The product differentiation and strategic position is becoming increasingly tough for the companies.
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	258	+The economic condition of the country is somewhat favourable for this industry in a sense. The country has experienced a slower growth due to Covid-19, 5.47% growth, though, yet the budget size kept growing over the years. Owing to the government’s effort to develop the infrastructure of the country, the economic activities is on a boom. Income level of the people has increased, so did purchasing power. A lower interest rate has fostered a better risk environment for the investors. The investors are given the space to seize the opportunity of growing population, rising income level, and rapid economic growth to bring about new business areas and flourish the economy further.
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	260	+Some social factors are important to consider in this industry. Improved standard of living has driven the people towards availing more banking services. The government is taking every step to increase financial inclusion in the country. The population and literacy rate in the country is increasing day by day. Technology in the country is entering into the root level. The people are having better access to the smartphones, internet, and latest technologies. The development of 5G infrastructure is ongoing in the country which will help it to be marching with the latest world.
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	262	+Green banking initiatives are taken in Bangladesh. The institutions are therefore directed to investigate the environmental impact of a project before financing it. There is a directive to maintain a certain percentage of agricultural loan in the total loan portfolio. One final remark about this industry is that the high regulation oftentimes become burdensome for the industry therefore, the financial institutions need to stay decisive in such situations.
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	264	+= Financial performance of LankaBangla =
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	266	+LankaBangla Finance Limited has reported gross income of BDT 8,146 million in 2020, which was BDT 10,172 million in 2019. The gross revenue has decreased by 19.91% during this year mainly due to the impacts of Covid-19. In the gross income, interest income has been BDT 5,972 million, which was BDT 7,275 million – a 17.91% decrease. The company has reported BDT 987 million in total profit after tax in 2020, which was BDT 508 a year earlier. Despite the subside in the gross revenue, the company managed to report a 94.29% growth in the profit after tax. The company has reported this high growth in profit because of lower provision maintenance and a decrease in the overall operating cost due to its reduced workforce during the year. It has shrunk its workforce from 1,804 in 2019 to 1,391 in 2020.
	267	+
	268	+Total asset base of the company stands at BDT 81,835 million which was BDT 84,362 million during the end of the previous year. Net assets value (NAV) per share of the company in 2020 is BDT 18.73, which was BDT 17.60 in 2019. The growth has been due to the increase in total equity for an increase in profit during the year. Cash balance of the company in 2020 is BDT 631.53 million which was BDT 877.74 million. The company has declared a 12% cash dividend in 2020 with no associated stock dividend, which was 7% cash and 5% bonus in 2019.
	269	+
	270	+Earnings per share (EPS) of the company in 2020 has been BDT 1.81, which was BDT 0.98 in 2019. Price to earnings ratio (P/E) as on May 05, 2022 is 17.18 times. Return on assets (ROA) of the company during the latest year is 1.06% and return on equity (ROE) is 8.05% during the same period. These ratios were 7.23% and 0.91%, respectively, in the previous period. Return on capital employed (ROCE) during 2020 is 1.16% which was 0.99% in the previous year. The company has reduced its amount of debt which is apparent from its debt-to-equity ratio of 5.71 times in 2020 and 6.23 times in 2019. Capital adequacy ratio (CAR) of the company is 18.83%, which is well above the regulatory requirement of 10%.
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	272	+= Recent developments =
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	274	+* LankaBangla Finance Ltd has posted a growth of 31% in terms of profit for the year ended December, 2021. Annual profit reported for this year is BDT 1,300 million compared to BDT 970 crore in the previous year. Consolidated EPS of the company stood at BDT 2.38, which was BDT 1.81 in 2020.{{footnote}}https://www.tbsnews.net/economy/stocks/lankabangla-finance-posts-31-profit-growth-2021-402134{{/footnote}}
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