Strong Performance Driven by Higher Interest Income and Lower Loan Impairment
Singapura Finance has reported a 67% increase in its net profit after tax for the second half of the financial year ending December 31, 2021, reaching S$4.7 million, up from S$2.8 million in the same period last year. The mainboard-listed finance company attributed this growth to higher net interest income, increased hiring charges, and a reduction in loan impairment allowances. Earnings per share for the second half of FY2021 also saw a significant increase, rising 66.9% to S$0.0594, compared to S$0.0356 in H2 FY2020.
For the full year, Singapura Finance’s net profit surged by 101.8%, reaching S$9.6 million, up from S$4.8 million in FY2020. This growth was driven by improved financial results across various segments, and earnings per share for FY2021 jumped 102% to S$0.0606, from S$0.03 in FY2020.
Dividend Announcement
The board of Singapura Finance has recommended a first and final dividend of S$0.02 per share, along with a special one-tier tax-exempt dividend of S$0.02 per share, subject to shareholder approval at the upcoming annual general meeting. This is an increase from the S$0.015 dividend declared in FY2020.
Key Financial Highlights
For the second half of FY2021, Singapura Finance saw a 35.4% year-on-year increase in net interest income and hiring charges, which rose to S$12.4 million from S$9.2 million. This was mainly attributed to a significant 56.1% reduction in interest expenses, which fell to S$2.5 million from S$5.7 million. The company’s H2 net charge for loan impairment losses also decreased by 9.7% to S$0.7 million, compared to S$815,000 in H2 FY2020.
As of FY2021, the group’s total loan portfolio, net of allowances, grew by 6.9% to S$896 million, up from S$838 million in FY2020. Total deposits remained relatively stable at around S$908 million.
Outlook for 2022
Looking ahead to 2022, Singapura Finance remains cautiously optimistic about the domestic operating environment, citing Singapore’s high vaccination rates as a positive factor. However, the company acknowledged that inflation could lead to earlier or more significant interest rate hikes, potentially affecting global financial conditions. Singapura Finance plans to stay alert to commercial risks while positioning itself for growth as the economy rebounds and consumer and business confidence recovers in a post-Covid-19 world.
Shares of Singapura Finance closed at S$0.845 on Thursday, up 1.8% or S$0.015, before the announcement.
