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Access Financial Services' headquarters in St Andrew, Jamaica (Photo: YouTube)

Slow loan climate affects Access Financial Services

Access Financial Services' headquarters in St Andrew, Jamaica (Photo: YouTube)

Access Financial Services Limited (AFS) has reported net profit after tax of $128 million for the nine months ended December 31, 2020.

Net profit for the period, therefore, declined by 65 per cent compared to JM$369 million earned in the same period in 2019. As a result, earnings per share for the period of JM$0.47 compared to $1.34 for the prior year.

AFS management said that the performance of the group reflected the impact of COVID-19 over the past nine months as loan disbursements have declined year-on-year due to the reduction in economic activity.

Access Financial Services’ headquarters in St Andrew, Jamaica (Photo: YouTube)

Nevertheless, the company has continued to support customers in meeting their financial needs with special loan offers and the company’s scholarship program.

Asset value lowers with declining loan disbursements

As at December 31, 2020, the group’s asset base stood at JM$5.49 billion, reflecting a decrease of JM$57 million or one per cent year over year. 

Cash and cash equivalents amounted to JM$554.6 million in December, up from JM$195.07 million for the same period in 2019, with management noting that they are maintaining additional cash to manage liquidity risk during the pandemic. 

“We continue to experience higher disbursements levels each quarter since the onset of the pandemic, as consumer confidence returns and economic activity resumes”

Loans and advances in December stood at JM$4.05 billion, a reduction of 12 per cent year over year based on the lower level of disbursements.

Net operating income for the nine months ended December 31, 2020 amounted to JM$1.35 billion, a decrease of JM$345 million or 20 per cent compared to the corresponding period last year.

Net interest income and net fee and commission income was lower based on the reduction in disbursements for the period as a result of COVID-19.

Expenses down

Operating expenses for the nine-month period fell to JM$1.17 billion, compared to JM$1.28 billion in the prior year. 

Access Financial Services’ cash and cash equivalents increased significantly due to enhanced liquidity risk management during the pandemic. (File photo)

Excluding the allowance for loan losses, operating expenses for the period decreased by JM$95 million or 10  per cent year over year, with management noting this occurred as they implemented measures  to improve operational efficiency. 

Despite higher delinquency levels in selected segments of the economy due to the impact of COVID-19, allowance for credit losses decreased year over year by JM$18 million or sic per cent due to improved delinquency management.

“We continue to experience higher disbursements levels each quarter since the onset of the pandemic, as consumer confidence returns and economic activity resumes,” management stated.

Total liabilities decreased by JM$188 million or six per cent year over year to JM$3.17 billion as at December 31, 2020, as a result of the reduction in loans payable as at the period end.