Despite its consolidated net profit falling by 19 per cent to $265.69 million and its loan book shrinking by 9 per cent to $4.09 billion for its 2021 financial year (FY), Access Financial Services Limited has begun to see a recovery in its business as the fourth quarter produced a net profit of $137.84 million compared to a net loss of $38.76 million for the period ending March 31.

The microfinance group which operates in Jamaica and in Florida through its wholly owned subsidiary Embassy Loans Inc has been seeing a steady decline in earnings over the years with the pandemic forcing the company to taper disbursals.

Although its stand-alone company loan book only shrunk by 3 per cent to $3.76 billion, the fallout associated in the tourism dependent state of Florida saw the group’s loan book decrease from its peak of $4.47 billion. This was evident from the 12 per cent reduction in the group’s net interest income to $1.27 billion. Group operating income fell by 16 per cent to $1.82 billion as fees and commissions on loans decreased by 33 per cent to $412.55 million while other operating income grew by 57 per cent to $137.41 million.

Group operating expenses declined by 16 per cent to $1.48 billion due to the 8 per cent drop in staff costs to $670.51 million and a 36 per cent drop in other expenses to $393.90 million. Expected credit losses on the group’s loan book declined slightly to $295 million while its loans written off during the 2021 FY stood at $291.36 million.

However, only $93.35 million was recorded in expenses for the group. This left AFS with a group profit before tax of $341.31 million which is 14 per cent lower than the prior FY. Embassy’s loss contribution rose from $7 million in the prior FY to $13.42 million while AFS’ segment profit declined by 16 per cent to $354.73 million. With the company no longer benefiting from a tax remission, AFS’ group tax bill went up by 13 per cent to $75.62 million which left the group with a profit of $265.69 million. Earnings per share declined from $1.20 to from $1.20 to $0.97.

Group total assets fell by 8 per cent to $5.49 billion with its cash balance slightly decreasing to $543.49 million. Cash flow from operations fell sharply from $381.11 million in the 2020 FY to $85.29 million. Total liabilities declined by 20 per cent to $3.04 billion as the group’s loan balance shrank by 21 per cent to $2.54 billion as it paid down on its Proven Investments Limited, Micro Investment Development Agency and Inter-American Development Bank. Shareholders equity increased by 13 per cent to $2.45 billion.

Although AFS is far from its 2018 FY record $716.03 million net profit, it expects to benefit from the opportunities from the new Microfinance Act which should see consolidation in the newly regulated sector. AFS loan book grew from $4.05 billion to $4.09 billion between December and March which demonstrates the slow recovery of its business. Florida has fully vaccinated 46 per cent of its population while Jamaica has partially vaccinated at least 6 per cent of its population. AFS will pay out $54.90 million in dividends to shareholders next Friday in the form of a $0.20 dividend.