Singapura Finance

Went through the list of topics starting with 'S' and could not find Singapura Finance. 
Admin, please help delete this and almagate with existing thrad if exists.

Noticed Singapura Finance share prices have hit lows which are unseen in 10 years period

Share price now at 87 cents (accurate at time of posting).

NAV at S$1.55 (Source:  announcement for Dec 15 results)

6 mths EPS at 1.48 cents

Interest expense which increased significantly is a drag.

http://infopub.sgx.com/FileOpen/Announce...eID=388798


Changed its year end from June to Dec.  No AGM dates for buffet lovers in 2016.

Their operating expense increased quite alot.

For the six months ended 31 December 2015, the Group’s operating profit before allowances
declined by 22.9% to $3.0 million vis-à-vis the same period last year. Net interest income grew
by 6.2% driven primarily by higher loan yield while non-interest income increased 13.7% mainly
due to higher fees income. Total income grew by $0.8 million or 6.7% but was more than offset
by increase in operating expenses by $1.7 million or 21.2%. Total operating expenses
increased, largely attributed to higher other operating expenses, particularly amortisation of
commissions to auto-loan dealers.

Their interest income are not able to grow faster than the pace which interest expense increases.
Perhaps there may a timing lag, as I guess their loans are structured at a credit spread plus a float component (Prime Leding Rate / SIBOR)? Not all loans that have their interest rate reset period falling within the period concerned while the company needs to increase interest rate to entice depositors to continue placing deposits and gaining new ones??

This is really bad. NO DIVIDEND this year.

Please take note that they have changed their financial year end to 31 December 2016. So, dividend will most possibly be paid when they report their full-year results somewhere next year.

Thanks gh Chua! I m such a noob lol. By the way, any thoughts on their profitability?
Seems like low interest rate environment is bad for them. They managed to cut cost significantly but if interest rates stay low, they are still not going to make much profits.

Hi ZZF,

Few points to note that had resulted in lower 12 month profits:
1. Lower net interest income despite interest income increasing. Looks like net interest margin is being squeezed. (-ve)
2. Higher loan allowances despite lower loan balance. (-ve)
3. Higher operating expenses mainly due to commissions to auto-dealers. (-ve)
4. Higher non-interest income. (+ve)

All in, a poor set of results despite a decent 4Q. Obviously, the first 3Q was bad and 4Q couldn't offset them.

Actually, lower interest rate will benefit them as funding costs will be low. It is not a matter of low or high interest rate, but you should look at the net interest margin instead. It seems that their funding costs is raising faster than the rate that they manage to lend out. Maybe it is also because they are more careful on who they lend to, as economy is no good and they are more prudent.

Funding costs increase primarily due to heightened rate from usa or usd.

Why did they have the rights offering in '14? Looked like they were well capitalized...

Anyone had a look at this value trap lately?

@ just over $1 its trading at net cash value with no debt and this quarter earnings quite ok. NAV $1.60