November 16, 2020
Net interest income improved 36% to $882.59 million relative to $651 million in 2019. Management noted that, “this largely reflected the continued expansion of our fixed income and credit portfolios as our overall balance grew during the year.”
Dividend income fell 72% to total $8.68 million compared to the $30.67 million earned in 2019. Gains on sale of investment decreased to $1.41 billion (2019: $1.87 billion).
Foreign exchange trading and translation amounted to a gain of $978.45 million compared to a gain of $353.50 million recorded for the previous year.
Fees & commissions income rose by 164%, to close at $1.83 billion (2019: $693.27 million). BIL noted, “the rise in fee income during the period was primarily driven by the Group’s continued growth in assets under management via our asset management business despite the market environment, coupled with the significant progress we have made in our investment banking business during the second year of operations.”
BIL also noted that, “the growth in non-interest income was principally attributable to a sharp uplift in fees and commission income and foreign exchange trading and translation gains. Non-interest income as a percentage of net revenues was 83% during the period, continuing to reflect the Group’s focus on optimizing its revenue mix with a tilt towards fee-based income.”
Notably, BIL reported other income of $103.92 million for the year relative to $378.03 million in 2019. As such, net operating revenue amounted to $5.21 billion relative to $3.98 billion recorded for 2019. Net operating revenue for the fourth quarter amounted to $1.44 billion in contrast to $1.16 billion booked for the fourth quarter of 2019.
Administrative expenses for the year amounted to $1.15 billion, increasing 28% from $896.74 million in 2019. Staff costs for the year rose 53% from $553.55 million booked in 2019 to $846.09 million. BIL reported an ‘Impairment/ Expected Credit Loss (ECL)’ of $110.79 million (2019: $75.16 million) for the year. Total expenses for the year rose 38% to close at $2.11 billion compared to $1.53 billion recorded in 2019. Management stated that, “year over year rise in expenses was driven by increases in staff costs and administrative expenses, set off against a decline in the Group’s investment portfolio in addition to a reassessment of ECLs charges in prior periods which overestimated loss given defaults, However, in recognizing the current and future impacts of COVID-19, out profitability of default estimates was also increased during the year. The rise in expenses during the year reflects the Group’s continued investments in the critical pillars of its transformational growth strategy to include the optimization of our human capital management, customer acquisition initiatives, and customer experience infrastructure.”
As such, profit before tax amounted to $3.11 billion relative to a profit before taxation of $2.45 billion in 2019.
Following taxation of $347.44 million (2019: $741.54 million), the Company reported net profit of $2.76 billion, relative to the profit of $1.71 billion booked in 2019. Net profit for the quarter amounted to $755.25 million, 165% above the $285.10 million for the corresponding quarter of 2019.
Total comprehensive income for the year amounted to $2.19 billion (2019: $1.94 billion).
Earnings per Share (EPS) for the fourth quarter totalled $0.70 relative to $0.26 in 2019. EPS for the year amounted to $2.54 compared to $1.58 recorded for the prior year. The number of shares used in our calculations amounted to 1,085,603,093 units. BIL stock price closed the trading period on December 23, 2020 at $83.20 with a corresponding P/E of 32.74 times.
Balance Sheet at a glance:
As at September 30, 2020, total assets amounted $70.69 billion (2019: $41 billion), a $29.69 billion improvement as a result of the growth in “Pledged Assets” which increased by 224% to a total of $35.43 billion (2019: $10.93 billion).
Shareholders’ Equity amounted to $27.48 billion relative to $13.67 billion in 2019 resulting in a book value per share of $33.31 relative to $16.57 in 2019.
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