November 1, 2019.
Access Financial Services Limited (AFS) for the six months ended September 30, 2019 reported $830.75 million in total interest income, a 6% increase relative to the $787.27 million recorded in 2018. Of this, interest income from loans amounted to $830.07 million (2018: $784.71 million), while interest income from securities totalled $686,000 (2018:$ 2.56 million). Total interest income for the quarter amounted to $422.82 million, a 10% increase on the $385.61 million reported for 2018.
Interest expense charged for the period totalled $103.20 million, a 113% increase compared with the $48.54 million booked in 2018. This resulted in AFS booking a net interest income of $727.55 million for the period, 2% less than the $738.73 million in 2018.
Net fees and commission income for the period under review amounted to $342.77 million, a 387% increase from the $70.32 million in 2018.
AFS booked a total of $1.07 billion for Net Trading Income, which increased by 32% relative to the $809.05 million in 2018.
AFS reported income from Money Services and Other Income of $980,000 (2018: $845,000) and $37.49 million (2018:$22.99 million) respectively. Foreign exchange also posted a gain of $2.32 million (2018: $18.53 million). As such, other operating income for the period totalled $40.79 million compared with $42.36 million in 2018.
Management noted, “Net Operating Income for the six month period ended September 30, 2019 amounted to $1.11 billion, an increase of $260 million or 31% with the consolidation of Embassy Loans. In order to achieve the significant growth in the loan portfolio, margins have declined due to the competitive nature of the market. The increase in Net Fee & Commission Income year over year is based on Embassy Loan’s business model to generate higher fee revenues.”
AFS reported operating expenses for the period amounted to $824.89 million (2018: 422.98 million), while for the quarter, $447.24 million (2018: $224.42 million) was booked. Of this:
- Staff Costs totalled $339.72 million (2018: $205.68 million)
- Allowance for Credit Losses amounted to $184.72 million (2018: $50.12 million)
- Depreciation & Amortization amounted to $16.23 million (2018: $18.20 million)
- Marketing Expenses totalled $34.38 million (2018: $14.58 million)
- Other Operating Expenses booked for the period totalled $249.84 million (2018: $134.40 million)
AFS reported profit before taxation of $286.22 million for the period relative to $428.43 million recorded in 2018. Following a taxation amount of $6.59 million (2018: $32.81million), AFS booked a profit for the period of $279.63 million, a 29% decline relative to the $395.62 million recorded for the comparable period in 2018. Profit for the quarter totalled $114.60 million, 32% lower than the $167.59 million reported in 2018. The Company noted, “This 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 include the consolidation of the performance of Embassy Loans Inc. (Embassy Loans), which was acquired in December 2018.”
Consequently earnings per share for the period amounted to $1.02 (2018: 1.44) while EPS for the quarter $0.42 (2018:$0.61). The trailing twelve months earnings per share amounted to $1.31. The total number of shares used in the calculations amounted to 274,509,840 units. Additionally, AFS’s stock price closed at $37.16 as at the end of trading on November 1, 2019.
Balance Sheet Highlights:
As at September 30, 2019, the company’s assets totalled $5.63 billion, up 55% from $3.63 billion in 2018. This increase was largely attributable to ‘Loans and Advances’ which amounted to approximately $4.70 billion, $1.57 million more than $3.13 billion in 2018.
Shareholder’s equity as at September 30, 2019 stood at $2.46 billion (2018: $2.65 billion) resulting in book value per share of approximately $8.97 (2018: $9.67).
Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.