Singapura Finance’s earnings have plunged 65.3% to $1.9 million in the six months ended June 30 from $5.6 million a year ago.

The weaker bottom line was primarily attributed to lower net interest income and hiring charges of $9.1 million, down 19.9% y-o-y to from $11.3 million.

This was due to the increase in cost of deposits having outpaced the rise in interest income with a higher loan base, the company says.

The weaker bottom line was also due to higher impairment allowances on loans, says the financial services company.

Singapura Finance says it incurred a net charge for loan impairment losses amounting to $1.5 million in the half-year period, compared to a net write back of $1.3 million during the same period last year.

This was mainly attributed to additional allowances for non-impaired loans with the weaker economic outlook in the current COVID-19 pandemic environment, it says.

With the dismal outlook for Singapore and the global economies, Singapura Finance says it expects business to slow down and credit conditions to remain “extraordinarily difficult for all”.

The company says it is monitoring its customers’ payment patterns closely.

It adds that it will be prudent by lending to customers with a good track record.

Singapura Finance closed up 1 cent or 1.3% at 78 cents on Aug 7.