One of the island’s leading non-bank financial institutions has put in an on-par performance for the 2020 financial year despite the COVID-19 pandemic.
SigniaGlobe Financial Group is an amalgamation of two finance houses, following the 2018 acquisition of Globe Finance by its competitor, Signia Financial for $11.8 million.
Releasing its 2020 audited financial statement for the period ending December 31, SigniaGlobe’s chairman John Williams and chief executive officer Paul Ashby, announced a net profit of $5.62 million.
This was just marginally below the 2019 performance of $5.63 million.
Williams and Ashby described 2020 as a year that introduced “unprecedented social and economic challenges with the global COVID-19 pandemic”.
The two cited the “negligible tourist arrivals for an extended period” that led to the closure of many hotels and tourism dependent businesses that contributed to a spike in unemployment in the country.
“The secondary effects of this were compounded throughout the economy, and an economic contraction of 18 per cent was recorded over the year,” they noted in the public filings.
As a result, SigniaGlobe joined others in the financial sector to offer discretionary six-month moratoria to borrowers who had difficulty servicing their loans due to the economic shock of the pandemic.
However, even in these circumstances, the company’s directors pointed out: “SigniaGlobe Financial remained strongly capitalized with a capital adequacy ratio of 15.85 per cent at the period’s end.
The company also managed to grow the loan portfolio from $334.18 million to $335.28 million, while strategically reducing deposit holdings by 3.70 per cent from $354.66 million to $341.55 million, with the objective of effective margin management.”
Importantly, the company increased its net interest income across its portfolio of offerings.
As a result, net interest income increased from $17.98 million in 2019 to $18.66 million last year.
Commenting on the matter of loan delinquency, Williams and Ashby said the economic situation on the island led to increased delinquency throughout the financial sector.
“In response to this, SigniaGlobe has bolstered their efforts in this area to ensure increased responsiveness to customers experiencing difficulties,” the directors noted.
Offering their predictions on how the company may perform one year after the pandemic hit, they noted:
“2021 is expected to be another challenging year with the impact of COVID-19 still looming over international economies.
The introduction of vaccination programmes globally provides some hope of recovery over the year, but regardless of the circumstances presented, SigniaGlobe Financial will endeavour to build and grow going forward. (IMC1)