Photo credit: Credit Corporation
The first half of the financial year 2021 has started off well for Credit Corporation Group, indicating a small recovery in financial performance from the severe contraction last year.
The Group is concerned about the impact of the pandemic on its Pacific points of representation in the second half of 2021, with borders staying closed, delinquency levels rising, and uncertainty about when borders will reopen to kick-start local economies.
Credit Corp reported a net profit after tax of K53 million and a core operating profit of K49.7 million in the first half of the year.
In comparison to the 2020 half-year figures, this represents a 104 per cent and a 122 per cent rise, respectively.
In addition, the Group earned a return on equity of 10.9 per cent, up from 5.3 per cent in 2020.
Given the economic conditions, Group Chairman Richard Sinamoi stated the Group's outcome was gratifying.
“The result can be attributed to lower operating costs and higher dividend income from the Group’s investments,” he said.
“Total expenses decreased by 46 per cent to K37.4m compared to 1H20, and this was largely attributed to improvements in loan impairment outcomes.”
Despite the difficult business climate, the Group's balance sheet remained strong.
The Group's liquidity position remained solid at K209 million, with the loan-to-deposit ratio being constant at 97.6%.
The Group's strong financial position allowed it to return the excess money to shareholders throughout the first half.
As a consequence, a total dividend of 18 toea per share was declared.
The Finance section of the Group generated NPAT of K11.3 million, a considerable increase over the previous equivalent period's performance.
“Group impairment costs reduced by 94 per cent to K2.4m in 1H21 compared to 1H20. The decrease was largely attributed to impairment costs normalising this year, as compared to that experienced at the outset of the COVID-19 pandemic recognised last year,” Sinamoi said.
Danny Robinson, the Group's chief executive, said the company's strong financial performance despite the present economic climate in the Pacific meant it was well-positioned to adapt to the quickly changing operating environment while continuing to assist its clients.
“We are refreshing our strategic priorities to ensure we continue to build on our strong foundations and position us for the future.
“This is refining and refocusing of our priorities will enable the business to focus on the new challenges and opportunities ahead,” he said.
Reference: Post-Courier (17 September 2021). “Credit Coporation Profits Rebound in 2021”.
