November 12, 2021

ISP Finance Services Limited’s (ISP) total interest income amounted to $318.36 million compared to $263.62 million in 2020, an increase of 21%. For the quarter, total interest income amounted to $114.13 million (2020: $85.84 million). Of this:

• Interest income from loans increased by 21% to total $318.36 million relative to $263.62 million reported in the same period of 2020.
• Interest income receivables rose to $476 (2020: $189).

Interest expense totaled $23.11 million relative to $22.22 million in 2020; this represents a 4% climb year over year. As a result, net interest income rose by 22% to total $295.25 million (2020: $241.39 million). Net interest income for the quarter amounted to $106.41 million (2020: $78.49 million). Management noted that, “the performance to date reflects a targeted approach to sales and customer service.”

Commission expense on loans rose by 17% to $5.40 million (2020: $4.62 million). In addition, Foreign Exchange Loss totaled $87,095 in 2021 compared to a loss of $79,404 the prior year. Whereas, other income amounted to $41,000 (2020: $395,544). Services fees closed the period at $138,000 (2020: nil).

As such, operating income amounted to $289.66 million in 2021, a 22% increase relative to that of $237.09 million. For the third quarter operating income increased by 34% to $104.12 million (2020: $77.49 million).

The company’s total operating expense amounted to $230.58 million, up 24% from $186.33 million in 2020, while for the quarter operating expenses rose by 41% to amount to $80.10 million (2020: $56.92 million), due to “the company’s conservative policy of loan loss provisioning for loans in arrears,” as per ISP. The expenses for the nine months are broken down as follows:

• Staff Costs amounted to $87.40 million (2020: $79.70 million).
• Allowance for Credit Loss totalled $58.30 million (2020: $30.83 million).
• Depreciation was $5.77 million (2020: $4.02 million).
• Other Operating Expenses amounted to $79.11 million (2020: $71.78 million).

Profit before taxes totalled $59.08 million (2020: $50.75 million) following a tax incurred for the period under review of $5.79 million (2020: nil), as such net profit for the period amounted to $53.29 million relative to a profit of $50.75 million in 2020, a 5% increase. Net profit for the quarter amounted to $21.02 million (2020: $20.56 million).

As a result, EPS for the period closed at $0.51 (2020: EPS $0.48). The EPS for the quarter was $0.20 (2020: $0.19). The 12-month trailing EPS is $0.65, and the number of shares used in our calculations is 105,000,000 units. Notably, ISP closed the trading period on November 11, 2021 at a price of $45.00 with a corresponding P/E of 69.56 times. Balance

Sheet Highlights:

As at September 30, 2021, ISP reported total assets of $799.38 million, a 14% increase when compared to $698.48 million in the prior year. Notably, the increase was attributed to an 11% increase in ‘Loans, net of provisions for credit losses’ to $698.09 million (2020: $630.50 million) and a 128% increase in ‘Cash & Cash Equivalent’ to $50.98 million (2020: $22.23 million).

Shareholders’ Equity as at September 30, 2021 was $462.02 million compared to a $394.09 million in 2020. This resulted in a book value per share of $4.40 compared to $3.75 the prior year.

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