SINGAPORE (Aug 14): IFS Capital today announced 2Q17 earnings of $95,000, representing a 81.1% decline from the $0.5 million it posted in 2Q16 on higher net claims incurred (NCI) in its insurance business.
Income interest rose 5.9% to $6.2 million while interest expense fell 13% to $1.4 million. As a result, net interest income grew 13.2% to $4.8 million.
Consequently, net interest income margin improved to 6.6% in 2Q compared to 6.1% in 2Q16.
Non-interest income grew 15.3% to $5.6 million from $4.8 million a year ago due to a higher net earned premium, contributed mainly from the group’s motor insurance business.
Meanwhile, operating expenses remained flat over the quarter at $5.8 million which IFS attributes to a more efficient use of resources.
During the quarter, the group incurred net claims of $2.5 million due to higher net claims paid through motor insurance, as well as provision for case reserves in the motor insurance and workmen injury compensation divisions.
For 2Q17, the group recorded a net cash outflow of $2.7 million.
On the business front, IFS says it is beginning to reap the benefits of its strategy of its factoring and secured lending businesses, where the group continues to build scale through the acquisition of new accounts.
“We will continue to grow in a prudent way and expect to see further improvements as more of these new accounts become fully on-boarded,” says the group in its regulatory filing on Monday.
“As for the insurance business, we have addressed challenges in the general insurance business, particularly in the motor insurance segment where claims have been large. We believe that the measures we have taken will eventually improve the profitability of this business segment,” it adds.
Shares in IFS Capital closed flat at 24 cents on Monday.
