Financiera Independencia’s reports 16.7% Microfinance Loan Portfolio Growth

Microfinance Focus, July 29, 2010: Financiera Independencia, the Mexican microfinance provider has reported its Net Income up by 4.9% (year on year) to Ps.143.5 Million with loan portfolio growth of 16.7% for 2Q10. The company has yesterday announced its results for the three-month period ended June 30, 2010.

Unaudited results for 2Q10 include the effect of the consolidation of the acquisition of Financiera Finsol, S.A. de C.V., SOFOM, E.N.R., the second largest group lending microfinance institution in Mexico, and several related companies (collectively, “Finsol”) on February 19, 2010.

The loan portfolio growth was driven by a 15.2% increase in client base, mainly from CrediPopular and Finsol. Finsol’s total loans reached Ps.783.4 million in 2Q10, a 7.8% sequential growth from the Ps.726.7 million posted on 1Q10.

Non-performing loans to total loans ratio have also improved to 11.2%, compared to 12.7% in 2Q09. NIM after provisions including fees of 42.6% in 2Q10 below the 48.9% in 2Q09, reflecting the effect of the surplus cash remaining from the US$200 million bond issue.  For the first half of the year this ratio stood at 50.8% compared to 49.2% in 1H09. Provisions for loan losses in 2Q10 represented 32.5% of financial margin, compared with 40.0% in 2Q09, and 31.4% in 1Q10.

Efficiency ratio was 80.5% in 2Q10, the increase mostly due to the integration of Finsol and its related non-recurring expenses for the quarter of Ps. 41.7 million.  Excluding Finsol, the efficiency ratio improved to 71.9% in 2Q10 from 73.4% in 1Q10, and better than the 2009 quarterly average of 74.3%. 

Equity to total assets increased to 34.1% from 29.7% in 2Q09, and 27.2% in 1Q10. ROE in 2Q10 down to 19.8% from 24.4% in 1Q10 and 33.7% in 2Q09, mainly due to the Ps.850 million capital increase undertaken during 1Q10 to fund Finsol’s acquisition. For the first half of the year the ROE was 23.4%, compared to 32.7% in 1H09.

Commenting on the results, Noel Gonzalez, Chief Executive Officer, said, “We are driving considerable growth in Finsol’s loan portfolio and client base, reflecting not only the availability of funding that we have secured for the business, but also the increased sales and marketing support.  Also, we made progress on the operational efficiency side, reducing head count by 270 people, mainly in administrative positions, as we already consolidated our Human Resources and Finance organizations.” 

“We are implementing additional actions to improve client retention and grow our core business, including the launching of a mass media campaign, and implementing further initiatives to facilitate access for our clients to make payments.”

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