ASA International Group plc -
Q4 2024 Trading and Business Update
ASA International Group plc (LSE:
ASAI), one of the world's largest international microfinance
institutions, today provides a trading update including a
business operations update for the three-month
period ended 31 December 2024.
Highlights
·
On a preliminary unaudited basis, reported net
profit for 2024 is expected to be approximately USD 24m (2023: USD
8.8m). This was achieved against the backdrop of the continued
negative impact of the need for hyperinflation accounting in Ghana
and Sierra Leone in 2024.
·
Momentum seen in the business through 2024
continued into Q4 2024 where ASA International delivered strong
operational performance as the loan book grew following increased
demand from clients. Gross OLP increased by
9% in the quarter to USD 458m as at 31 December 2024 (30 September
2024: USD 420m) and by 22% in the year (31 December 2023: USD
377m). This OLP growth was predominantly
driven by Pakistan, Ghana, Kenya, Tanzania and Uganda. Pakistan,
Ghana, Kenya, Tanzania and Uganda were also the key contributors to
the 3% growth in the overall client base to 2.5m at the end of the
quarter versus Q3 2024.
·
High portfolio quality was maintained alongside
this OLP growth. PAR>30 slightly
improved to 2.2% as
at 31 December 2024 (30 September 2024: 2.3%, 31 December
2023: 2.1%), primarily due to greater portfolio
quality in Nigeria, Rwanda, Sri Lanka.
Outstanding portfolio quality was recorded in Pakistan, Ghana,
Kenya, Uganda and Myanmar with PAR>30 less than 0.5% as at 31
December 2024.
·
Based on third-party sources, the current
assessment for 2025 is that only Sierre Leone will be subject to
hyperinflationary accounting. Ghana, which contributed the vast
majority of the hyperinflation accounting impact on the Group's
accounts in 2023 and 2024, is currently forecasted not to be
considered hyperinflationary in 2025. Should this be the case, it
would mean that the overall impact of hyperinflation accounting on
the Group's accounts in 2025 is expected to be materially
reduced.
·
On 16 January 2025, ASA India informed the Reserve
Bank of India of its intention to surrender its microfinance
licence. ASA India has been a challenging market for the Group and
having regard to the need to reduce costs given the deteriorating
financial profile, associated liquidity concerns, ongoing lender
defaults, and the contemplated move to a business correspondence
business rather than on-book lending, it was felt that the decision
to surrender of the microfinance licence was in the best interests
of the wider Group. Furthermore, this decision to surrender the
microfinance licence also aligns with the broader intention of ASA
International to ultimately divest ASA India.
·
All banks in Pakistan, including ASA Pakistan,
have received notification from the State Bank of Pakistan of the
need to prepare and submit a plan for the conversion to Islamic
banking from conventional banking.
·
Digital strategy and transformation programme
remains on track with the rollout of the Core Banking System
combined with the implementation of the digital financial services
app in Ghana and Tanzania planned for the second half of
2025.
·
ASA International resumed its dividend policy on 5
December 2024 with the announcement of an interim dividend of USD
0.03 per share. The 2024 final dividend will be announced alongside
the FY24 results on 24 April 2024.
Rob
Keijsers, Interim Chief Executive Officer,
stated:
"ASA International saw strong operational growth throughout
2024 as demand for our products from clients remained robust. Total
number of clients surpassed 2.5m and OLP increased by 22% by the
end of 2024 with Pakistan, Ghana, Tanzania, Kenya and Uganda
driving this growth. Our proven, low risk model ensured that this
loan growth was not achieved at the expense of portfolio quality,
with PAR>30 remaining low at 2.2% for the whole company at the
end of the year. This operational performance also translated into
significantly improved profitability with net profit almost
trebling versus 2023. The resumption of our dividend policy by the
Board was also a particular highlight as we return to a more
normalised operating environment.
"2024 also saw the organisation welcoming onboard new local
CEOs for Uganda, Rwanda and Nigeria. They are already providing
fresh perspectives to ASA International alongside their significant
professional, banking and leadership experience.
"Looking forward to 2025, we expect to see growing demand for
loans and ever greater productivity across the organisation as we
drive efficiency in the branch network and therefore reduce our
cost-income ratio. From a digital transformation standpoint, we
will build on the successes of 2024 by continuing the roll-out of
the core banking system and digital platform to Tanzania and
Ghana."
Preliminary 2024 Results
Building on the momentum seen in the
first half 2024, ASA International continued to deliver improved
business performance in the second half of the year with sustained
high demand for loans from clients. As a
result, on a preliminary unaudited basis, reported net profit for
2024 is expected to be approximately USD
24m, which is significantly higher than the USD 8.8m net profit
recorded in 2023. The results remain
subject to the completion of the Group's year-end audit process
which will finalise certain adjustments relating to ASA India,
hyperinflation accounting and tax provisions. ASA International
believes that the consensus estimates of 2024 net profit on a
reported basis as at the date of this announcement is USD
20.8m.
Hyperinflation
The IFRS standard IAS 29 "Financial
Reporting in Hyperinflationary Economies" requires the adjustment
of financials of those operating entities, which are reporting in
the currency of hyperinflationary economies with the main indicator
being three-year cumulative inflation exceeding 100% for the prior
three year period. The application of this accounting standard
ensures that all items are presented to reflect the current
purchasing power at the reporting date. As at the end of 2024,
Ghana and Sierra Leone are both considered to be hyperinflationary
economies and this will be reflected in the Group's full-year 2024
results.
As at the date of this announcement
and based on available third-party sources, the current assessment
for 2025 is that only Sierre Leone will be subject to
hyperinflationary accounting. Ghana, which contributed
the vast majority of the hyperinflation accounting impact on the
Group's financials in 2023 and 2024, is forecasted to not to be
hyperinflationary in 2025. Should Ghana ultimately not be deemed a
hyperinflationary economy in 2025, the overall impact of
hyperinflation accounting in 2025 is expected to be materially
reduced compared to 2023 and 2024. Nigeria remains on the
watchlist, while Pakistan has been removed from the watchlist
following positive inflation developments in 2024.
Business Operations Update
|
|
Clients (in
thousands)
|
Delta
|
Number of
branches
|
Delta
|
|
End of
period
|
Dec-23
|
Sep-24
|
Dec-24
|
Dec 23
- Dec
24
|
Sep 24
- Dec
24
|
Dec-23
|
Sep-24
|
Dec-24
|
Dec 23
- Dec
24
|
Sep 24
- Dec
24
|
|
Pakistan
|
616
|
631
|
662
|
8%
|
5%
|
345
|
369
|
380
|
10%
|
3%
|
|
India (total)
|
183
|
181
|
172
|
-6%
|
-5%
|
180
|
176
|
175
|
-3%
|
-1%
|
|
Sri Lanka
|
43
|
43
|
44
|
2%
|
4%
|
64
|
64
|
63
|
-2%
|
-2%
|
|
South Asia
|
842
|
855
|
878
|
4%
|
3%
|
589
|
609
|
618
|
5%
|
1%
|
|
The Philippines
|
333
|
356
|
353
|
6%
|
-1%
|
370
|
400
|
400
|
8%
|
0%
|
|
Myanmar
|
111
|
122
|
122
|
10%
|
0%
|
88
|
89
|
91
|
3%
|
2%
|
|
Southeast Asia
|
444
|
479
|
475
|
7%
|
-1%
|
458
|
489
|
491
|
7%
|
0%
|
|
Ghana
|
201
|
212
|
223
|
11%
|
5%
|
143
|
152
|
153
|
7%
|
1%
|
|
Nigeria
|
184
|
155
|
150
|
-19%
|
-3%
|
263
|
268
|
273
|
4%
|
2%
|
|
Sierra Leone
|
39
|
39
|
43
|
11%
|
12%
|
46
|
47
|
49
|
7%
|
4%
|
|
West Africa
|
425
|
405
|
416
|
-2%
|
3%
|
452
|
467
|
475
|
5%
|
2%
|
|
Tanzania
|
248
|
264
|
278
|
12%
|
5%
|
202
|
221
|
221
|
9%
|
0%
|
|
Kenya
|
205
|
256
|
262
|
28%
|
2%
|
132
|
145
|
145
|
10%
|
0%
|
|
Uganda
|
121
|
138
|
150
|
24%
|
9%
|
120
|
125
|
125
|
4%
|
0%
|
|
Rwanda
|
21
|
22
|
23
|
10%
|
3%
|
32
|
37
|
37
|
16%
|
0%
|
|
Zambia
|
25
|
29
|
29
|
15%
|
-1%
|
31
|
39
|
39
|
26%
|
0%
|
|
East Africa
|
619
|
709
|
742
|
20%
|
5%
|
517
|
567
|
567
|
10%
|
0%
|
|
Group
|
2,330
|
2,447
|
2,511
|
8%
|
3%
|
2,016
|
2,132
|
2,151
|
7%
|
1%
|
·
Total number of clients across all regions
increased to 2.5m, 3% higher than at the end of Q3 2024 and 5%
higher than at 31 December 2023. This growth was primarily driven
by increased client numbers in Pakistan, Ghana, Tanzania, Kenya and
Uganda.
|
|
Gross OLP (in
USDm)
|
|
Delta
|
PAR>30
|
|
End of
period
|
Dec-23
|
Sep-24
|
Dec-24
|
Dec
23- Dec
24 (USD)
|
Dec
23- Dec
24 (CC)
|
Sep
24- Dec 24
(USD)
|
Dec-23
|
Sep-24
|
Dec-24
|
|
|
Pakistan
|
70
|
83
|
90
|
29%
|
29%
|
9%
|
0.3%
|
0.5%
|
0.5%
|
|
|
India (total)
|
46
|
48
|
40
|
-12%
|
-9%
|
-15%
|
3.1%
|
4.6%
|
5.4%
|
|
|
Sri Lanka
|
4
|
5
|
5
|
29%
|
16%
|
10%
|
5.0%
|
5.4%
|
4.9%
|
|
|
South Asia
|
120
|
135
|
136
|
13%
|
14%
|
1%
|
1.7%
|
2.2%
|
2.1%
|
|
|
The Philippines
|
55
|
61
|
60
|
9%
|
14%
|
-1%
|
3.8%
|
6.4%
|
6.8%
|
|
|
Myanmar
|
22
|
26
|
27
|
26%
|
26%
|
4%
|
0.2%
|
0.2%
|
0.3%
|
|
|
Southeast Asia
|
77
|
87
|
88
|
14%
|
18%
|
0%
|
2.8%
|
4.5%
|
4.8%
|
|
|
Ghana
|
52
|
53
|
67
|
30%
|
59%
|
27%
|
0.1%
|
0.2%
|
0.2%
|
|
|
Nigeria
|
18
|
9
|
12
|
-33%
|
16%
|
34%
|
12.1%
|
7.2%
|
4.9%
|
|
|
Sierra Leone
|
5
|
6
|
7
|
40%
|
39%
|
16%
|
4.6%
|
9.1%
|
9.4%
|
|
|
West Africa
|
75
|
68
|
86
|
16%
|
48%
|
27%
|
3.3%
|
1.9%
|
1.5%
|
|
|
Tanzania
|
65
|
69
|
85
|
31%
|
27%
|
24%
|
0.9%
|
1.4%
|
1.3%
|
|
|
Kenya
|
21
|
36
|
36
|
75%
|
44%
|
0%
|
0.3%
|
0.2%
|
0.3%
|
|
|
Uganda
|
13
|
16
|
19
|
44%
|
40%
|
16%
|
0.8%
|
0.2%
|
0.2%
|
|
|
Rwanda
|
4
|
5
|
5
|
26%
|
38%
|
16%
|
6.8%
|
6.3%
|
5.1%
|
|
|
Zambia
|
3
|
3
|
3
|
10%
|
18%
|
-2%
|
2.6%
|
3.3%
|
3.4%
|
|
|
East Africa
|
106
|
129
|
149
|
41%
|
32%
|
15%
|
1.1%
|
1.1%
|
1.1%
|
|
|
Group
|
377
|
420
|
458
|
22%
|
26%
|
9%
|
2.1%
|
2.3%
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
·
Gross OLP increased to USD 458m - 9% higher than
at the end of Q3 2024 and 22% higher than at 31 December 2023. This
growth was predominantly driven by Pakistan, Ghana, Nigeria,
Tanzania and Uganda.
·
Gross OLP in India decreased to USD 40m - on-book
decreased from USD 3.2m to USD 2.5m at 31 December 2024 and
off-book portfolio decreased from USD 44m to USD 38m at 31 December
2024. The on-book portfolio decreased as the Group continues its
strategy of shrinking its on-book portfolio. The decrease in
off-book portfolio was again primarily due to reduced activity
levels from BC partners. It is the intention of the Group to
withdraw from the Indian microfinance market.
·
PAR>30 for the Group, including off-book loans
and excluding loans overdue for more than 365 days, slightly
improved to 2.2% at the end of Q4 2024. This was
primarily due to greater
portfolio quality in Nigeria, Rwanda, Sri Lanka. Outstanding portfolio quality was recorded in Pakistan,
Ghana, Kenya, Uganda and Myanmar with PAR>30 less than 0.5% as
at 31 December 2024.
Notes
(1) Constant currency ('CC') implies
conversion of local currency results to USD with the exchange rate
from the end of December 2023.
(2) PAR
refers to 'Portfolio at Risk'. PAR>30 is
the percentage of outstanding customer loans with at least one
instalment payment overdue 30 days, excluding loans more than 365
days overdue, to Gross OLP including off-book loans. Loans overdue
more than 365 days now comprise 0.6% of the Gross OLP.
(3) 'ASA International', the
'Company', the 'Group' all refer to ASA International Group plc and
its subsidiaries.
(4) The Company has elected to cease
the disclosure of metrics on a quarterly basis in its Business
Updates relating to 'collection efficiency' and 'disbursement vs
collection of loans'. Given the normalisation of ASA
International's business and operations following the end of the
COVID-19 pandemic, these metrics are deemed no longer
relevant.
Contact Details
ASA
International Group plc
Investor Relations
Jonathan Berger
ir@asa-international.com
About ASA International Group plc
ASA International Group plc (LSE:
ASAI) 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.
Disclaimer
This announcement does not constitute
or form part of any offer or invitation to purchase, otherwise
acquire, issue, subscribe for, sell or otherwise dispose of any
securities, nor any solicitation of any offer to purchase,
otherwise acquire, issue, subscribe for, sell, or otherwise dispose
of any securities. The release, publication or distribution of this
announcement in certain jurisdictions may be restricted by law and
therefore persons in such jurisdictions into which this
announcement is released, published or distributed should inform
themselves about and observe such restriction.
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.
The person responsible for the
release of this announcement on behalf of the Company for the
purposes of MAR is Tanwir Rahman, Chief Financial
Officer.