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(Alliance News) - ASA International Group PLC on Wednesday reported a sharp rise in profit in 2019 on double-digit client and loan growth.
In 2019, the emerging markets microfinance lender saw its net profit jump 41% to USD34.5 million from USD24.5 million in 2018.
ASA's cost-to-income ratio, however, worsened to 60% from 55% in 2018.
At December 31, ASA's outstanding loan portfolio stood at USD467.4 million, 24% higher than the USD378.5 million seen at the same point a year prior.
ASA's average outstanding loan per client grew 6% to USD184 from USD174 the year before. The microlender's total number of clients increased 17% to 2.5 million.
The percentage of the loan book that has one or more instalment of repayment of principal past due for more than 30 days increased to 1.5% in 2019 from 0.6% in 2018.
ASA has decided against paying a dividend in 2019, compared to 7.3 US cents in 2018 - deferring the decision until later in 2020.
"The performance of the group was good in 2019 with double-digit client and loan growth," Chief Executive Dirk Brouwer said.
He continued: "East Africa had an excellent year with client and US dollar portfolio growth in excess of 40% and 55%, respectively, while keeping PAR>30 at less than 1%. We faced more challenging market conditions in India, Nigeria and Sri Lanka, which caused PAR>30 of the group to increase to 1.5%, which nevertheless remains best-of-class in the global microfinance sector.
"With the exception of the Pakistan rupee and the Ghanaian cedi which depreciated by 11% and 16% in 2019, our operating currencies depreciated more or less as expected. As a result, the group's earnings growth for the year was 7%, which, whilst below our initial expectations, in view of the more challenging market circumstances we faced in some countries, slightly exceeded our revised expectations as."
In the first quarter of 2020, ASA said its trading was in line with expectations - opening 42 new branches.
The microfinance did note, however, it suffered a "sluggish" last two weeks of March, resulting in net profits coming in lower than initially expected in what traditionally ASA's slowest quarter of the year.
The company added: "Lockdowns in Pakistan, Ghana, Kenya, Nigeria, Myanmar, Rwanda, Sri Lanka, Sierra Leone, Tanzania and the Philippines have ended or relaxed, which enabled us to re-open our branches and resume our field activities. The only two countries which have not resumed operations yet are India, which plans to start collections on June 1, and Uganda. Collection efficiency up to May 28 has been relatively strong and is increasing in the countries that have resumed operations."
Shares in ASA International were down 3.1% in London on Wednesday afternoon at 115.50 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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