SINGAPORE (Feb 23): IFS Capital, the finance company and insurer for SMEs, reported earnings of $2 million in FY17 compared to a loss of $2.6 million in FY16.
This came on the back of a 57.3% rise in 4Q17 earnings to $2.6 million from $1.8 million a year ago on higher sales and lower provision for impairment.
4Q17 saw a 23.4% rise in net interest income to $4.9 million on the back of a 17.4% increase in interest income from factoring, loans, hire purchase and leasing to $6.3 million. Factoring volume increased by $35.4 million from a year ago.
Interest expense fell 0.4% to $1.4 million. Consequently, net interest income margin improved to 6.3% in 4Q17 from 5.6% in 4Q16.
Non-interest income increased by 11.3% to $5.8 million during 4Q17 mainly contributed by higher investment income. Compared to 4Q16, investment income increased by 429.6% contributed by redemption of convertible loans, gain on disposal of investments, and net change in fair value of investments.
Net claims incurred in 4Q017 increased by $0.8 million.
Pre-tax profit for 4Q17 came in at $3.1 million compared to $2.2 million a year ago.
In its outlook, IFS Capital says its core business, which is factoring and lending, is gaining momentum across all its markets. It admits its insurance business continues to be a drag on the group’s profitability and have identified the root causes and are in the process of remedying the issues.
The group expects to remain profitable in FY18.
Shares in IFS Capital closed at 30 cents on Friday.