Credit Corporation (SI) Limited
I am pleased to report that Credit Corporation (SI) Limited recorded an operating profit of SBD12.09 million (K3.23 million), which translates to an 83.18% increase over 2011 result.
The exceptional result was driven by increase business volumes gained from activities in the transport, agricultural, construction, mining, fishing and distribution sectors and this has contributed to the overall revenue growth by 55% to SBD16 million (K4.31 million) in 2012.
Total dividend payment of SBD6.4 million (K1.72 million) was paid out in 2012. This is a well rewarding return for our shareholders in PNG.
Notwithstanding a slight increase in our expenditure by 8%, the overall Cost to Income Ratio was maintained around 20% throughout the year and we forecast similar trend in 2013. No major CAPEX is committed in 2012 and 2013 respectively. We maintained a strong and growing balance sheet and the quality of our loan portfolio is very good. The default level was maintained below 3% throughout the year.
The Central Bank of Solomon Islands conducted a review on our operations in October and we have yet to receive their report. Whilst we forecast for continued growth in 2013 as indicated in our budget, this will be lower compared to 2012 as we believe we have reached the level our business can comfortably absorb, taking into consideration our size and the country’s projected economic growth of 4% in 2013.
Solomon Islands Government had passed a donor subsidised budget of USD400 million (SBD3 billion or K0.81 billion) for 2013 to cater for its recurrent costs and development programs. Total credit to private sector continues to hold above SBD1billion (K270 million). The bank’s lending rate in the market has gradually reduced from 14% to as low as 7% to selective commercial businesses. This is to counter the excess liquidity in the system which continues to hold above SBD2 billion (K539 million) compared to 12 months ago. Our market share in credit to private sector is 9%, which is considered a very good standing given our size. Our product pricing remains competitive and well aligned with our risk exposure.
Credit Corporation is committed to continue to delivering attractive and competitive financial services to individuals and businesses in Solomon Islands in the future, as we have proven since our inception in Solomon Islands in 2005.