Access Financial profits dip amid pandemic
Access Financial Services (AFS) indicates that the onset of the coronavirus (COVID-19) pandemic resulted in a decline in economic activity which affected profit.
The company recorded net profit of $330 million for the year ended March 31, 2020, compared to $446 million for the year ended March 31, 2019.
The 26 per cent decline in net profit was attributable to lower net interest margins and an increase in operating costs, particularly in relation to a higher allowance for credit losses and loans written off.
Access Financial Group CEO, Marcus James said despite the impact of COVID-19, the company is looking to strengthen its revenue stream.
“We remain open to looking at strategic acquisitions that would allow us to grow our market share and provide geographic diversification in order to strengthen our revenues streams,” James told Loop News.
Recent organisational changes see James with direct responsibility for the execution of expansion and acquisition strategies and extracting synergies across the group’s operations in Jamaica and its wholly-owned subsidiary, Embassy Loans Inc., based in Florida, US.
Meanwhile, Frederick Williams who joined AFS in October 2019 as Chief Operating Officer, has been promoted to general manager.
In this role, Williams will be charged with the day to day leadership and management of AFS, with special focus on digital transformation and improved operational efficiencies in serving the needs of customers in the microfinance industry.
Christopher Williams will serve as chairman, following the retirement of Rex James.
Directors, in the company’s recently released financial results, noted the contraction in the tourism sector and the entertainment industry, including the closure of hotels and local bars.
Before the pandemic, the company experienced strong results with the first year of the full consolidation of Embassy Loans, which AFS acquired in 2018.
Loans and advances for the group increased by $1.06 billion or 31 per cent year over year and stood at year-end at $4.47 billion.
This included disbursements for both Access and Embassy Loans, of 22 per cent and 20 per cent respectively.
Net operating income for the year ended March 31, 2020, amounted to $2.15 billion, an increase of $506 million or 31 per cent with the consolidation of Embassy Loans.
Management said the increase in net fee and commission income of $306 million year-over-year came from Embassy loans, which generated a significant amount of its revenue in fees.
Total assets as at March 31, 2020, was $5.96 billion, compared to the restated amount of $4.50 billion as at March 31, 2019.
Total liabilities increased by $1.18 billion year-over-year to $3.79 billion as at March 31, 2020, primarily attributable to increased debt financing.
Access Financial said the company the impact of COVID-19 by “providing temporary relief assistance to customers; increased the use of technology to submit loan applications via the websites, and direct to bank disbursements.”
The company recognised $47 million in its financial statements as at March 31, 2020, from the anticipated increase in expected credit losses.
Management said they have been proactive in “managing liquidity positions and taking steps to reduce operating costs.”