Company well positioned for recovery due to risk mitigation
Proven Investments Limited (PIL) is reporting a creditable September quarterly performance, even though profits were down 17 per cent.
Considering the effects of COVID-19 and its continued impact on the local and global economy, Proven says its net profit for the quarter of US$4.80 million was good in comparison with the profit of US$5.81 million recorded in September 2019. The decline in profits primarily reflects decreases in net interest income, fees and commission income, emanating from a reduced equity holding in Access Financial Services Limited and lower business activity.
Proven, in its latest quarterly results, says while the trajectory of the economic recovery remains uncertain as the negative effects of COVID-19 continue, it is “well positioned for recovery due to its continued implementation of its risk mitigation measures aimed at mitigating the impact along with maintenance of adequate liquidity levels”.
Proven’s top priority remains centred around continued growth of its Private Equity and Real Estate strategies through acquisitions and the protection of stakeholders.
The company has performed well due to the diversity of its portfolio companies, which speaks to the resilience displayed during COVID-19.
For the six-month period ended September 30, 2020, PROVEN Wealth Limited reported profit of US$1.09 million on total revenues of US$4.97 million. Non-net interest income accounted for 71.6 per cent of total income, reflecting successful execution of the company’s strategy to diversify revenue streams and reduce reliance on the repurchase agreement business.
Pension management income, fees and commission and interest income were the top performing line items during the period. Total administrative and general expenses amounted to US$3.41 million, accounting for 38.4 per cent of total group operating expenses.
Total assets experienced a decline of 19.5 per cent year over year to US$106.89 million as at September 30, 2020. The decline in assets was primarily attributed to a 21.2 per cent contraction in investments steered by efforts to capture trading gains, boost liquidity and reduce debt.
BOSLIL BANK LIMITED
BOSLIL Bank in St. Lucia, of which Proven currently owns 75.0 per cent equity, recorded an impressive performance despite the challenging operating environment as net profit totalled US$5.28 million, resulting in US$3.93 million in profits. The boost in net profit was mainly driven by the 22.6 per cent increase in revenue to US$7.13 million year over year.
This emanated from a two-fold increase in securities trading gains to US$3.51 million in contrast to the same period last year. Net Interest Income, was up 31.2 per cent while other income, jumped by 68.8 per cent, reflecting the bank’s resilience in spite of the low interest rate environment.
BOSLIL’s efficiency ratio improved from 47.1 per cent as at September 2019 to 26.0 per cent as at September 2020, due mainly to a 32.4 per cent decline in expenses and a 22.6 per cent increase in revenues year-over-year. Total administrative and general expenses amounted to US$1.85 million, accounting for 20.8 per cent of total group operating expenses.
The bank’s total assets marginally declined by 1.1 per cent year-over-year to US$278.47 million as at September 2020. BOSLIL’s overall performance was mainly driven by growth in its core business, reflecting optimal asset-liability management and cost synergies, which resulted in the bank posting an increase of 71.5 per cent in net profit compared with the period ended September 30, 2019.
INTERNATIONAL FINANCIAL PLANNING LTD
International Financial Planning Limited reported a net profit of US$0.03 million compared to US$0.45 million earned in the same period last year. This decline in net profit is primarily due to a 37.5 per cent decline in the company’s revenue line item, Fees and Commission.
IFP is a licensed independent investment advisor with offices in Cayman, Bermuda and the British Virgin Islands that caters to a variety of investors ranging from medium to high net worth individuals. Proven reports that it “continues its process of re-engineering this business and anticipates revenue enhancement and cost synergy measures to bear fruit in the medium to long term.”
IFP operations are entirely focused on fee based off balance sheet activities and as a result 94.6 per cent of its revenue is derived from fees and commission, which contributed 50.0 per cent to the overall fees and commission reported by Proven for the period ended September 30, 2020.