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Sing Investments' Q2 net profit down 22% due to allowances made for Covid-19
SING Investments & Finance on Monday posted a 22.2 per cent decline in net profit to S$3.9 million for its second quarter ended June 30.
This was due to the additional general allowances provided in view of the severe impact of the Covid-19 pandemic on the macroeconomic situation and outlook, it said.
For the first six months of 2020, the financial company provided an additional S$3.3 million allowance for credit losses, versus S$300,000 in the first half of 2019. This resulted in a 19.7 per cent decline in net profit to S$8 million for the first six months, compared to S$10 million a year ago.
These allowances were mostly general allowances for non-impaired assets. "The group continues to maintain adequate and prudent loss allowances in respect of its loan portfolio and other assets," it said.
Revenue dipped 1.1 per cent to S$21.1 million for the quarter, and rose 3.2 per cent to S$43.1 million for the six-month period.
Loans and advances declined slightly by 1.5 per cent from S$2.19 billion as at end-December 2019 to S$2.15 billion as at end-June 2020, largely because of the circuit-breaker measures, which included the suspension of non-essential services in April and May.
But the company said that it has been actively supporting its customers with their working capital and cash flow needs during this difficult period via the Enterprise Singapore (ESG) Temporary Bridging Loans and Enhanced working capital loans.
"If not for the new ESG loans, the decline in the loan balances would have been greater," it said.
Customers’ deposits and balances decreased by 3.3 per cent to S$2.41 billion as at end-June 2020 compared to end-December 2019.
Notwithstanding the public health and economic crisis, the company is confident that its strong capital and liquidity positions will enable it to weather the crisis, it said.