Sing Investments & Finance S35 (SIF) has reported record profit for the second consecutive year, with net profit after tax growing 18% y-o-y to $37.2 million in FY2022.
This was driven by write-back from loan recovery, net interest margin (NIM) expansion and record lending volume.
Net interest income (NII) for FY2022 increased by 3% to $60.8 million as NIM widened to 2.19%. The rise in loan yield outpaced the increase in cost of deposit, the company says in a results filing.
Net profit after tax in 2HFY2022 grew 34% y-o-y to $17.5 million, its second half record performance.
Net interest income rose 11% y-o-y to $32.7 million in 2HFY2022, while NIM widened to 2.28%.
Customer loans expanded by 12% to $2.41 billion from the end of 2021, with the highest ever loan volume. In tandem with this, FY2022 customer deposits grew by 13% to $2.6 billion.
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Loan to deposit ratio for FY2022 was 92.5% compared with 93.3% a year ago. Despite higher debt service burden on customers caused by rate hikes, asset quality remained resilient, the company says.
Non-performing loan ratio improved to 1.1% from 1.7% in FY2021. Net loan recovery of $6.5 million was written back from non-performing loans to a corporate customer.
With rising interest rates, SIF’s bond portfolio which comprised Singapore Government Securities held for regulatory liquidity requirements continued to depreciate by $19.1 million. This was the key driver for the net deficit in other comprehensive income.
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In line with the record performance in FY2022, the company’s board of directors has recommended a first and final dividend of 10 cents per share one-tier tax exempt in respect of the FY2022.
The proposed dividend is 2 cents per share higher than the dividend for the FY2021.
The company had also announced the proposal of a bonus issue comprising 78 million bonus shares to its shareholders on the basis of 1 bonus share to be credited at nil consideration. This is without capitalisation of SIF’s reserves and as fully paid for every 2 existing shares in the capital of the company as at the record date to be determined by the directors.
The bonus shares will not be entitled to the first and final dividend proposed for the year 2022.
Against the less favorable economic backdrop, SIF will continue to stay vigilant in navigating the challenging macroeconomic and financial environment, the company says.
“We will monitor our risk exposures closely and will be proactive in managing NIM by regularly reviewing our pricing strategies. On the back of the strong business momentum, we will leverage on our existing customer relationships to grow our business and at the same time explore new opportunities,” it adds.
Shares in SIF closed 4 cents lower or 2.6% down on Feb 24 at $1.49.
