Credit Corporation expects to see a more positive result from its real estate and financial businesses following the reopening of borders and the easing of restrictions related to COVID-19.
Credit Corp chief executive Danny Robinson said with improving economic growth forecasts, there is potential for positive upside in several sectors.
Mr. Robinson made the update at the company’s recent annual general meeting.
He said that in fiscal 2022, Credit Corp will continue to make progress in simplifying its business and growing its core financial company franchise, while strengthening risk management.
“Loan demand should pick up as the economy improves. Essentially, we enter FY22 in good shape with a renewed focus on transitioning to a bank,” he said.
Mr Robinson said that the finance division in the last fiscal year 20221 had a net profit after tax of K25.8 million, compared to a loss of K6.1 million in FY20, and that the Favorable financial performance is attributed to tight expense control and lower depreciation costs. through a concerted collection effort.
“Despite the strength of our finance company franchise across the Pacific, the net loan book decreased by 18.8% to K410m from K504m in FY20, reflecting operational challenges faced by Group customers.
In parallel with the reduction of the loan portfolio, the Group has reduced its term deposit rates, which has reduced deposit levels while lowering financial costs.
This allowed the division to increase its net interest margin to 13.7% from 12.8% in fiscal 2020,” he said.
Mr Robinson said the property division achieved core operating profit of K10.2 million, down 11.3% from FY20’s K11.5 million.
“This reflects weaker demand for residential properties as COVID-19 restrictions have caused businesses to reassess their staff housing needs,” he said.