Credit Corp sees positive start to financial year

THE Credit Corporation Group has seen a positive start to the 2021 financial year, reflecting a modest improvement in the financial performance from a sharp contraction last year.
The company in its half year report for 2021 said however, recent developments throughout the Pacific in relation to the Coronavirus (Covid-19) pandemic highlighted the uneven transition to recovery and the ongoing risks associated with the pandemic.
The group remains concerned for the second half of 2021 with the impacts of the pandemic across its Pacific points of representation, borders remaining closed, delinquency levels high and the uncertainty as to when borders would reopen to kick-start local economies.
Against this economic backdrop, the group achieved a core operating profit of K49.7 million and net profit of K53 million, reflecting a 104 per cent increase and 122 per cent increase respectively, compared to the first half year result of 2020.
The group also achieved a return on equity of 10.9 per cent, compared to 5.3 per cent in the first half of 2020.
Group chairman Richard Sinamoi said the result was pleasing given the economic conditions.
“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 K37.4 million compared to first half of 2020 and this was largely attributed to improvements in loan impairment outcomes,” he said.
Despite the challenging business environment, the group retained a resilient balance sheet and maintained a strong liquidity position at K209 million with, the loan to deposit ratio relatively stable at 97.6 per cent.
During the period, the group’s robust capital position provided the flexibility to return surplus capital to shareholders. This resulted in a declared total dividend of 18 toea per share.