TIDMASAI
RNS Number : 4548T
ASA International Group PLC
15 November 2023
Press release
ASA International Group plc October 2023 Trading and Business
update
Trading in-line with the Group's expectation
Amsterdam, The Netherlands, 15 November 2023 - ASA
International, ('ASA International', the 'Company' or the 'Group'),
one of the world's largest international microfinance institutions,
today provides the following update on its business operations as
of 31 October 2023. The Company has seen a continued improvement in
the operating environment and business performance in the last
quarter, however, in line with previous guidance, the expected net
profit for the full year will be lower compared to 2022.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated by the
Market Abuse Regulation (EU) No.596/2014, as it forms part of UK
law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").
Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
October 2023 Trading update highlights
-- We have seen a continued improvement in the operating
environment and business performance of our operating entities
since June 2023. This is in line with the guidance we provided
alongside the 2023 interim results.
-- ASA Pakistan was granted approval for "Commencement of
Microfinance Banking Business" on 13 November 2023. The
mobilization of deposits is dependent upon the successful
implementation of its core banking system, which is nearing
completion.
-- The unrestricted cash and cash equivalents position of the
Group remained at a healthy level of USD 41 million as at 31
October 2023, compared to USD 45 million at 30 June 2023.
-- PAR>30 for the Group's operating subsidiaries, excluding
off-book portfolio, improved to 2.2% at the end of October 2023
from 3.8% at the end of June 2023, primarily due to write-offs of
long overdue loans in India. PAR>30 remains excellent below 1%
in our major operations in Pakistan, Ghana, and Tanzania.
-- The Company continued to have a strong funding pipeline of
USD 182 million fresh loans as per end of October 2023 (30 June
2023: USD 181 million), with over 97% having agreed terms. These
can be accessed in the short to medium term. The total amount of
new debt raised in the year-to-date 31 October 2023 amounted to USD
130 million.
-- The currencies in our major operating markets have been
relatively stable vis-a-vis the USD when comparing 31 October 2023
with 30 June 2023.
-- ASA India received the first tranche of USD 1.5 million
equivalent from the government of Assam as part of the Category III
payments and further payments are expected in the coming
months.
-- The Company is actively pursuing deposit taking licenses in
Kenya and Tanzania with an application for a microfinance bank
license expected to be submitted before the end of this year.
October 2023 Business update highlights
-- The Group's Gross OLP increased to USD 362 million (3% higher
than at 31 August 2023 and 1% higher than at 31 October 2022),
primarily due to growth in Pakistan and Tanzania, with all other
entities showing growth with the exception of India.
-- All operating subsidiaries achieved collection efficiency of
95% or more, with 10 countries achieving 97% or more.
-- Collection efficiency in India improved to 95% in October
2023 compared to 85% in August 2023. We continue to decrease our
own portfolio while increasing the BC portfolio in India, which
helps to retain good clients.
-- PAR>30 for the Group, including off-book loans and
excluding loans overdue more than 365 days, improved to 2.1% at 31
October 2023 from 3.2% at 31 August 2023, primarily due to
write-offs of long overdue loans in India.
-- Excluding all loans which have been overdue for more than 180
days and, as a result, have been fully provided for, PAR>30
improved to 1.2% at 31 October 2023 from 1.6% at 31 August
2023.
-- Disbursements as a percentage of collections exceeded 100% in
11 countries. The decreased percentage in India was due to the
strategic decision to retain cash for upcoming debt repayments.
Funding
The cash and cash equivalents position of the Group remained at
a healthy level of USD 41 million as at 31 October 2023 (USD 45
million at 30 June 2023). The Company continues to have a strong
funding pipeline of USD 182 million fresh loans as per 31 October
2023 (30 June 2023: USD 181 million), with over 97% having agreed
terms and can be accessed in the short to medium term.
The total amount of new debt raised in the year-to-date 31
October 2023 amounts to USD 130 million. The Group also closed a
Holding financing facility with the United States International
Development Finance Corporation (' DFC') for USD 15 million on 26
September 2023. When fully drawn, this would bring Holding net debt
to around USD 53 million, which is at a stable level compared to
pre-covid net debt of USD 53 million at the end of 2019. The
Company remains confident of continued access to funding, while
focusing on reducing the proportion of debt funding sourced at the
Holding level over time. This will be achieved by (i) our operating
subsidiaries attracting more debt from local and international
lenders, and (ii) increasing remittances from our subsidiaries to
the Holdings which have recently improved, as well as accelerating
our deposit taking capabilities over time.
The Company and its operating subsidiaries remain well
capitalised and are meeting local regulatory requirements.
Implementation of Core Banking System and Digital Strategy
The implementation of the digital strategy remains on track with
the go live of the core banking system in Pakistan planned in the
coming weeks. The roll out of the core banking system combined with
the implementation of the digital app in Ghana is planned for the
first half of next year.
The implementation of the latest technology that is secure and
stable is expected to drive operational growth and efficiency as
well as providing the platform for a broader, more sophisticated
product offering in the near future, while complying with
regulatory demands.
Key events October and November 2023
-- The Group Holdings signed a loan facility agreement for USD 15 million with the United States International Development Finance Corporation on 26 September 2023. The term of the loan is five years with the first drawdown of USD 10 million received on 10 November 2023.
-- ASA India received the first tranche of USD 1.5 million
equivalent from the Assam government as part of Category III
payments honouring the MoU signed with MFIs to settle outstanding
overdues and defaults of microfinance clients by directly
reimbursing MFIs. The expected balance by ASA India for this
category of payments is approximately USD 5.0 million. Additional
tranches are expected in the coming months, with the second tranche
currently being processed for submission to the Assam
government.
-- On 13 November 2023 the State Bank of Pakistan ("SBP")
allowed ASA Microfinance Bank (Pakistan) Limited ("ASA Pakistan")
the "Commencement of Microfinance Banking Business". ASA Pakistan
shall continue performing lending operations. It will commence
deposit mobilization upon the SBP having given permission thereto,
which is dependent upon the successful implementation of its core
banking system (T24 by Temenos) and compliance with certain
conditions set by the SBP.
Collection efficiency until 31 October 2023 (1)
Countries May/23 Jun/23 Jul/23 Aug/23 Sep/23 Oct/23
---------- ---------- ---------- --------- ---------
Pakistan 100% 100% 100% 100% 100% 100%
India (total) 86% 85% 87% 85% 93% 95%
Sri Lanka 96% 96% 96% 96% 96% 95%
The Philippines 99% 99% 99% 99% 98% 98%
Myanmar 100% 100% 100% 100% 100% 100%
Ghana 100% 100% 100% 100% 100% 100%
Nigeria 84% 87% 92% 95% 95% 95%
Sierra Leone 96% 96% 97% 98% 98% 98%
Tanzania 99% 99% 99% 99% 100% 100%
Kenya 100% 100% 100% 100% 100% 100%
Uganda 99% 99% 99% 100% 100% 100%
Rwanda 96% 96% 97% 97% 97% 97%
Zambia 98% 99% 99% 99% 99% 99%
----------------------- ---------- ---------- ---------- --------- --------- ---------
(1) Collection efficiency refers to actual collections from clients
divided by realisable collections for the period. It is calculated
as follows: the sum of actual regular collections, actual overdue collections
and actual advance payments divided by the sum of realisable regular
collections, actual overdue collections
and actual advance payments. Under this definition collection efficiency
cannot exceed 100%.
-- Collection efficiency remained stable at very high levels in
most of our operating countries compared to August 2023.
-- India collections improved to 95% in October 2023 compared to
85% in August 2023, due to further growth of our BC loan book.
-- Although market conditions in Myanmar and Nigeria remained
challenging, collection efficiency remained stable in both
markets.
Loan portfolio quality up to and including October 2023 (2, 3,
4)
Gross OLP (in USDm) Non-overdue loans PAR>30 less PAR>180
----------------------------------------
Aug/23 Sep/23 Oct/23 Aug/23 Sep/23 Oct/23 Aug/23 Sep/23 Oct/23
Pakistan 65 69 70 99.6% 99.6% 99.6% 0.2% 0.2% 0.2%
India (total) 50 49 44 70.0% 69.8% 77.2% 4.5% 4.5% 3.2%
Sri Lanka 4 4 4 88.9% 88.9% 86.8% 2.9% 2.7% 2.7%
Philippines 51 52 52 95.7% 95.4% 95.1% 1.3% 1.5% 1.8%
Myanmar 19 20 21 91.7% 92.2% 92.6% 0.0% 0.0% 0.0%
Ghana 45 46 46 99.4% 99.4% 99.7% 0.1% 0.1% 0.1%
Nigeria 18 18 18 79.4% 80.7% 81.9% 9.1% 7.0% 5.1%
Sierra
Leone 5 5 5 86.8% 87.5% 88.5% 2.0% 1.8% 1.6%
Tanzania 57 59 61 98.9% 98.9% 98.8% 0.5% 0.5% 0.5%
Kenya 20 21 21 99.3% 99.3% 99.3% 0.2% 0.2% 0.2%
Uganda 12 12 12 98.9% 98.9% 99.0% 0.5% 0.6% 0.4%
Rwanda 4 4 4 91.5% 91.3% 91.5% 4.0% 3.6% 3.9%
Zambia 3 3 3 94.1% 94.1% 94.4% 1.5% 1.3% 1.1%
-----------
Group 352 361 362 92.8% 93.0% 94.4% 1.6% 1.4% 1.2%
PAR>30 PAR>90 PAR>180
--------------------------- ------------------------- -------------------------
Aug/23 Sep/23 Oct/23 Aug/23 Sep/23 Oct/23 Aug/23 Sep/23 Oct/23
Pakistan 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.1% 0.0% 0.0%
India (total) 12.1% 11.6% 3.9% 10.3% 9.8% 2.0% 7.5% 7.1% 0.7%
Sri Lanka 5.8% 5.3% 4.8% 4.1% 3.7% 3.3% 2.9% 2.6% 2.2%
Philippines 2.3% 2.6% 3.0% 1.6% 1.7% 1.9% 1.0% 1.1% 1.2%
Myanmar 0.3% 0.2% 0.1% 0.3% 0.2% 0.1% 0.3% 0.2% 0.1%
Ghana 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0%
Nigeria 12.4% 13.3% 14.2% 10.2% 11.0% 11.9% 3.2% 6.3% 9.1%
Sierra
Leone 8.0% 6.7% 4.9% 7.1% 5.9% 4.3% 5.9% 4.9% 3.3%
Tanzania 0.8% 0.8% 0.8% 0.5% 0.5% 0.6% 0.2% 0.3% 0.3%
Kenya 0.4% 0.4% 0.4% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2%
Uganda 0.9% 0.9% 0.8% 0.7% 0.6% 0.6% 0.3% 0.3% 0.4%
Rwanda 7.4% 6.9% 7.5% 5.5% 5.3% 5.7% 3.4% 3.3% 3.7%
Zambia 4.1% 3.7% 3.3% 3.5% 3.2% 2.8% 2.6% 2.4% 2.2%
Group 3.2% 3.1% 2.1% 2.6% 2.5% 1.5% 1.6% 1.7% 0.9%
(2) Gross OLP includes the off-book BC and DA model, and loans valued
at fair value through the P&L ("FVTPL").
(3) PAR>x is the percentage of outstanding customer loans with at
least one instalment payment overdue x days, excluding loans more
than 365 days overdue, to Gross OLP including off-book loans. Loans
overdue more than 365 days now comprise 2.9% of the Gross OLP.
(4) The table "PAR>30 less PAR>180" shows the percentage of outstanding
client loans with a PAR greater than 30 days, less those loans which
have been fully provided for.
-- Gross OLP in India decreased to USD 44 million (12% lower
than at 31 August 2023 and 16% lower than at 31 October 2022) due
to write-offs of long overdue loans .
-- PAR>30 for the Group improved from 3.2% at 31 August 2023
to 2.1% at 31 October 2023, primarily due to write-offs of long
overdue loans in India.
-- Credit exposure of the India off-book IDFC portfolio of USD
11.2 million is capped at 5%. The included off-book DA portfolio of
USD 1.0 million has no credit exposure.
Disbursements vs collections of loans until 31 October 2023
(5)
Countries May/23 Jun/23 Jul/23 Aug/23 Sep/23 Oct/23
--------- --------- --------- --------- ---------
Pakistan 115% 109% 107% 118% 105% N/A(6)
India (total) 61% 141% 125% 130% 114% 64%
Sri Lanka 88% 84% 101% 94% 95% 109%
The Philippines 98% 101% 98% 104% 104% 103%
Myanmar 115% 103% 124% 120% 126% 124%
Ghana 110% 126% 115% 119% 118% 109%
Nigeria 126% 143% 109% 105% 94% 120%
Sierra Leone 110% 95% 134% 144% 127% 113%
Tanzania 110% 116% 104% 112% 113% 113%
Kenya 106% 107% 120% 118% 116% 113%
Uganda 103% 95% 98% 104% 110% 115%
Rwanda 115% 106% 98% 93% 120% 116%
Zambia 115% 103% 82% 101% 113% 124%
---------------------- --------- --------- --------- --------- --------- ---------
(5) Disbursements vs collections refers to actual loan disbursements made
to clients divided by total amounts collected from clients in the period.
(6) Disbursements vs collections for Pakistan was not yet available for
October 2023.
-- Disbursements as a percentage of collections exceeded 100% in
11 countries. The decreased percentage in India was due to a
strategic decision to retain cash for upcoming debt repayments.
Development of Clients and Outstanding Loan Portfolio until 31
October 2023
Gross OLP (in
Clients (in thousands) Delta USDm) Delta
Sept/23-
Oct/22-Oct/23 Oct/22-Oct/23 Oct/23
Countries Oct/22 Sep/23 Oct/23 Oct/22-Oct/23 Sept/23-Oct/23 Oct/22 Sep/23 Oct/23 USD CC (7) USD
Pakistan 605 616 611 1% -1% 81 69 70 -13% 10% 2%
India
(total) 371 201 190 -49% -5% 52 49 44 -16% -15% -11%
Sri Lanka 47 44 44 -8% -2% 4 4 4 10% -2% 2%
The
Philippines 327 332 333 2% 0% 46 52 52 12% 10% 0.4%
Myanmar 105 106 108 3% 2% 17 20 21 20% 20% 4%
Ghana 169 197 204 20% 4% 27 46 46 74% 48% -0.2%
Nigeria 241 176 187 -22% 6% 40 18 18 -55% -19% 3%
Sierra
Leone 37 41 42 12% 2% 5 5 5 7% 42% 2%
Tanzania 211 236 240 14% 2% 47 59 61 30% 39% 4%
Kenya 140 195 201 44% 3% 21 21 21 4% 29% 3%
Uganda 108 111 115 7% 4% 11 12 12 12% 11% 4.5%
Rwanda 21 20 20 -3% 1% 4 4 4 -8% 6% 3%
Zambia 21 24 24 12% 2% 3 3 3 -4% 31% 1%
Total 2,403 2,298 2,319 -3% 1% 358 361 362 1% 11.7% 0.4%
(7) Constant currency ('CC') implies conversion of local
currency results to USD with the exchange rate from the beginning
of the period.
-- The Group's Gross OLP slightly increased by 3% to USD 362
million compared to 31 August 2023 (1% higher than as at 31 October
2022), primarily due to growth in Pakistan and Tanzania, with all
other entities showing growth with the exception of India .
---
The person responsible for the release of this announcement on
behalf of the Company for the purposes of MAR is Tanwir Rahman,
CFO.
Enquiries:
ASA International Group plc
Investor Relations
Mischa Assink ir @asa-international.com
About ASA International Group plc
ASA International Group plc (ASAI: LN) is one of the world's
largest international microfinance institutions, with a strong
commitment to financial inclusion and socioeconomic progress. The
company provides small, socially responsible loans to low-income,
financially underserved entrepreneurs, predominantly women, across
South Asia, South East Asia, West and East Africa.
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