Sterling Investment reports 30.8 per cent increase in net interest income

Business

Sterling Investment reports 30.8 per cent increase in net interest income

BY KELLARAY MILES
Business reporter
milesk@jamaicaobserver.com

Wednesday, November 18, 2020

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Despite the continued effects of the novel coronavirus pandemic on the local economy, Sterling Investment Limited (SIL) recorded good returns on investments and has reported a 30.8 per cent increase in net interest income when compared to the previous year.

For its third quarter period ended September 30, the investment holding company managed by Sterling Asset Management saw net interest income amounting to $80.59 million when compared to $61.61 million recorded for the corresponding period last year.

SIL said that the year-on-year increase is attributed to a combination of lower interest expense and continued growth in the size of its portfolio. The company said that as interest rates remain low, it continues to see substantial increases in its net interest margins which has grown by some 90.7 per cent to date.

“SIL is generating more income post-COVID-19 than it was before. Investors will continue to benefit from the US dollar income SIL's portfolio generates through dividend payments,” the company said in its recently posted unaudited third quarter results.

SIL, which has been enjoying a good year despite the adverse effects on the pandemic on local and global markets, also saw revenues for its nine-lmonth period totaling $170.31 million some 20.8 per cent higher than the $140.9 million seen in the same period last year.

“This was driven by higher interest income and unrealised foreign exchange gains of 80.3 million or a 24.8 per cent increase when compared to last year,” SIL also said in its report.

For the period the company's net profit, however, decreased by 5.8 per cent to $94.4 million when compared to $100.21 million seen in the same period last year. This they have attributed to an increase in the unrealised held for trading revaluation losses of $21.6 million when compared to a gain of $8.8 million last year. Total assets for the period, however, increased by 7.1 per cent $1.7 billion.

The investment holding company, which has also increased its dividend payout by some 60 per cent for the quarter, is optimistic about its success and intent to reap continued success for its shareholders. SIL, based on its exposure to the developed countries, has said that it is well positioned to be among the first companies on the local stock market to benefit from global economic recovery.

“As the fallout from the COVID-19 pandemic continues, SIL continues to perform enhanced due diligence as it monitors the credits held by the portfolio and hunts for undervalued securities to enhance shareholder value,” the report said.


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