Escorts Investment Bank, which is owned by real estate tycoon Malik Riaz, has continued to pile up losses in every passing quarter of the current financial year that surged to Rs. 57.49 million in the nine months of FY2021 (July 2020 to March 2021).
This is 112 percent higher than the corresponding period of the last financial year.
The drop in interest rates, followed by the State Bank of Pakistan’s policy rates, have taken a toll on the revenue streams of the bank. The delays in the recoveries of loans also added staggering losses to the bank’s balance sheet.
The consistent losses to the investment bank made the expansion of its operations and the adding of new services, including launching microfinance banking, unfeasible.
According to its financial report, Escorts Investment Bank Limited continued to remain conservative towards writing new businesses. This and its persistently low-interest rates have affected its profitability and resultantly, and it reported a loss of Rs. 57.496 million against Rs. 21.476 million of the corresponding period last year.
Its main focus has been on recoveries of installments with a cautious approach to writing new business, especially in the case of microfinance
Additionally, its financial statements showed that its plans for expansion have been delayed as its “target market primarily belongs to the lower class which is most affected by COVID-19”.
Malik Riaz had acquired Escorts Investment Bank in 2018 along with millions of its liabilities. He had injected over Rs. 1 billion in it, opened up new branches, and launched housing finance services in the subsequent years. However, the bank could not withstand the burden of huge losses that persistently increased while its financial performance dipped unabatedly.
Source: Pro Pakistani