Access Financial Services Reporting Lower Interest Margins And Increased Allowance For Credit Losses For 29% Reduction In Net Profit After Tax For 6 Month Ended September 30, 2019
Access Financial Services Limited recorded consolidated net profit after tax of JA$280 million for the six-month period ended September 30, 2019, compared to the net profit of $396 million for 2018.
This Chief Executive Officer Marcus James said represents a 29% decline in net profit year over year due to lower interest margins and increased allowance for credit losses in keeping with the significant growth in the loan portfolio.
The results for this year he said also includes the consolidation of the performance of Embassy Loans Inc. (Embassy Loans), which was acquired in December 2018.
As at September 30, 2019 the Group’s asset base stood at $5.63 billion, reflecting an increase of 55% or $2.00 billion.
Loan and advances increased significantly year over year with the consolidation of Embassy Loans, and a 17% increase in loan disbursements year over year for the company, Access Financial Services Limited (Access).
Net Operating Income for the six-months amounted to $1.11 billion, an increase of $260 million or 31% with the consolidation of Embassy Loans.
Commenting further he reported that in order to achieve the significant growth in the loan portfolio, margins declined due to the competitive nature of the market.
Increases in Net Fee & Commission Income year over year he said was based on Embassy Loan’s business model to generate higher fee revenues.
Operating expenses for the six-month period was $825 million, compared to $423 million last year.
Allowance for credit losses increased year over year with the consolidation of Embassy Loans as well as a result of the increase in Access’s loan portfolio.
Excluding the allowance for loan losses, operating expenses for the period increased by $372 million year over year, of which Embassy Loans accounted for $219 million.
Access Financial Services closed the six-month period with reduced net profit after tax of JA$280 million, representing a decline of 29% when compared to the 2018.
This resulted in earnings per share for the period of $1.02.