Earnings sink for Access Financial as borrowers diminish

Access Financial Services Limited (AFS) recorded consolidated net profit after-tax of J$33 million for the three-month ended June 30, 2020, down 80 per cent compared to J$165 million for similar period in 2019.

Access Financial saw its net profit decline 80 per cent for the quarter ended June 30.

In total, disbursements are down nine per cent since March quarter 2020.
Group Chief Executive Officer, Marcus James, said in statements attached to the results that the results reflect “the continuing impact of COVID-19 on our business, as we see tepid loan disbursements and higher levels of delinquency.”

Loans and advances for the Group as at the period end was J$4.05 billion, a decline of two per cent year over year and nine per cent since the March 2020 due to the reduction in disbursements .

James observed that during the period, some customers have showed “good financial discipline” by making loan payments, despite the impact of COVID-19.

He stated, “We continue to monitor our delinquency levels which has increased during this period.”
Total assets as at June 30, 2020 was $5.79 billion, compared to the restated amount of J$5.37 billion as at June 30, 2019.

Total liabilities increased by J$259 million or per cent year over year to J$3.55 billion as at June 30, 2020.
The increase is primarily attributable to higher debt financing which was required to support the strong disbursements during the last financial year.

James said that while loan disbursements for Access were affected by the reduction in economic activity, however it has since improved with the relaxation of the restrictions implemented by the Government during June 2020.

Access said its Embassy Loans operations also saw reduced activity due to the coronavirus.

Operations in Florida, Embassy Loans Inc. (Embassy Loans) also experienced lower disbursement due to reduced economic activity and the stimulus packages offered by the US Government.

As at June 30, 2020, the Group’s asset base stood at J$5.79 billion, reflecting an increase of eight per cent or $424 million year over year.
James noted that given the ongoing assessment of the economic fallout and uncertainty surrounding the length of time the pandemic will persist, “we are currently are maintaining an increased level of liquidity reflected in the Cash and Cash Equivalents amount of J$858 million as at the period end.”

Loans and advances now stand at J$4.05 billion, a reduction of two  per cent year over year based on the lower level of disbursements in June quarter.