Home' Trinidad and Tobago Guardian : April 13th 2014 Contents One factor that hugely influ-
enced ANSA Merchant Bank
Ltd s 2013 results was the
81.5 per cent reduction in
its provision for impairment
Total assets expanded by ten per cent to
reach $6.1 billion from $5.5 billion as at Decem-
ber 2012. Cash and short-term funds increased
by $245.7 million to reach $1.05 billion from
the previous year s balance of $806 million.
The "pure cash" element declined to $465
million from the earlier period s $510 million.
In contrast, short-term deposit with other
banks more than doubled; this figure closed
2013 at $512.8 million from the 2012 balance
of $248.5 million. In addition, due to higher
levels of customers deposits, Central Bank
reserve deposits increased from $47.2 million
in 2012 to $73.7 million last year.
The bank s holdings of leased assets and
other instalment loans increased by 20.6 per
cent, moving from $760.9 million in the 2012
session to last year s net balance of $917.5 mil-
lion. These changes reflect the continuing
popularity of the company s "In One" system
for vehicle payment, insurance coverage and
The largest change in performing loans was
observed under the hire purchase category;
this balance improved from $707.7 million in
2012 to $847.6 million last year, an increase
of 19.8 per cent. Finance leases rose by 15.5
per cent to $271.2 million from the previous
level of $234.9 million.
Total holdings of investment securities
declined by $198.1 million to $2.6 billion; in
2012, this figure was $2.8 billion. These invest-
ments are grouped under two heading, (a) fair
value through statement of income and (b)
Under the first heading, its total holdings
declined from the previous level of $1.41 billion
to last year s $1.24 billion. Significant move-
ments occurred in its holdings of unquoted
equities, which jumped to almost $202 million
from a paltry $6 million in 2012. The bank s
stock of quoted equities increased to $440.9
million from the previous level of $349.7 mil-
lion. Its holdings of government bonds fell to
$149.5 million from the 2012 balance of $530.4
Under the latter heading, the most significant
drop occurred with its holdings of corporate
bonds; the balance closed 2013 at $403.8 mil-
lion from the previous year s figure of $584.4
million. Meanwhile, there was a $122 million
increase in its stock of state-owned company
securities; here, year-end balances increased
to $652.5 million from $530.5 million as at
The value of other debtors and prepayments
jumped from a mere $33.2 million at December
2012 to $279.5 million as at year-end 2013.
The largest component related to proceeds
from investment maturities and repayments,
which increased to $261.7 million from the
2012 balance of $21.7 million.
Total liabilities rose by 8.8 per cent to $4.36
billion from 2012 s $4 billion. Customers
deposits and other funding instruments
increased from $1.77 billion as at year-end
2012 to $2.1 billion as at December 2013. The
largest increase of $209.3 million was attrib-
utable to amounts from pension funds, credit
unions and trustees; their balances moved
from $338.8 million in 2012 to last year s $548.1
million. A smaller increase of $117 million was
recorded by private companies, estates and
financial institutions; in this case, the balance
moved to $855.8 million from $738.9 million
as at year-end 2012.
Insurance contract liabilities posted a 4.9
per cent increase, moving from $1.08 billion
as at December 2012 to $1.13 billion last year.
The biggest increase was in the life insurance
segment. Here, the value of contracts increased
to $859.4 million from $809.7 million as at
General insurance contracts moved from
$185.8 million at year-end 2012 to $184.4 mil-
lion last December. The premiums component
increased to $87.2 million from $81.1 million
in the previous year. On the other hand, the
claims element declined from $104.7 million
in 2012 to $97.2 million last year.
Shareholders equity increased from $1.53
billion in 2012 to $1.73 billion last year. This
improvement was primarily driven by the
increase in retained earnings, which rose to
$880 million from slightly less than $704 mil-
lion as at December 2012.
Based on that change, the book value of
each share moved up to $20.24 from $17.88
as at December 2012.
Income and profit
Total operating income increased to $797
million from the 2012 base of $747.2 million,
or by 6.7 per cent. With the exception of
investment income, all major components
exhibited higher numbers over what was
reported for 2012.
Net insurance revenue rose by 7.5 per cent
to $293.5 million from $273 million in 2012.
Gross premiums for 2013 amounted to $450.7
million with reinsurers taking up 151.2 million.
After negative adjustments for unearned pre-
miums and unexpired risks of $6 million, the
net figure came in at $293.5 million.
In 2012, gross premiums registered at $411.4
million with reinsurers assuming $133.3 million
of that income. Thereafter, negative adjust-
ments for unearned premiums and unexpired
risks consumed $5 million, bringing down the
net figure to $273 million.
Finance charges, loan fees and other interest
income rose by 23.8 per cent to $154.4 million
from $124.7 million in the prior year. Although
interest income on loans and advances declined
to $19.9 million from $22.7 million in 2012,
increases in other components more than
made up for this shortfall.
Earned finance charges advanced to $111
million from $95.8 million, representing an
increase of 15.9 per cent. However, the largest
improvement was recorded in the "other
income" line; here, the 2013 result came in at
$23.5 million, which was far greater (by 275
per cent) than the $6.3 million earned for 2012.
Other income increased by $18.1 million to
$79.9 million from 2012 s $61.8 million. The
bulk of this increase was concentrated in two
areas, "administrative fees and commissions"
and "foreign exchange trading and gains".
The former increased from $24.3 million in
2012 to $29.1 million last year. In the case of
the latter, income advanced to $18.3 million
from $3.8 million in the prior year. The most
significant decline occurred under the "other"
heading; this fell to $7 million last year from
$11.2 million in 2012.
The decline in investment income to $269.2
million from the previous year s $287.7 million
was influenced by significant swings of two
line items but in opposite directions.
First, interest and dividend income from
other financial assets declined to $96.1 million
in 2013 from the previous year s $142.6 million.
On the other hand, there was a positive change
in the realised gains on investments held at
year end designated at fair value through state-
ment of income; this value improved to $67.2
million from the 2012 level of $48.4 million.
Net operating income improved by 43 per
cent to $504.6 million from the 2012 figure
of $352.8 million. Helping to drive this increase
was the 81.5 per cent reduction in its provision
for impairment of investment values; this pro-
vision declined to $19 million from the 2012
level of $102.8 million. Also helping the result
was the fall in interest expense, which registered
at $72.4 million last year, from $89.4 million
in the previous period.
Selling and administrative expenses, at $165.6
million, were only slightly higher than the
$164.6 million recorded for 2012.
These changes saw 2013 pre-tax profits
come in at $338.9 million. This result was 80.1
per cent greater than the 2012 result of $188.2
million. With little change in the effective tax
rate of just over 21 per cent for both years, the
2013 net profit closed at $266.4 million. This
represented a 79.5 per cent increase over the
2012 result of $148.4 million.
AMBL structures its business along four
major segments, banking services, general
insurance, life insurance and mutual fund
management. The table above highlights data
for both 2012 and 2013.
Although not severely impacted by the pro-
vision for impairment of investment assets,
the life insurance segment produced a strong
improvement in its pre-tax profit, moving
from a modest $19.5 million in 2012 to a more
robust $68.4 million last year.
The 2012 impairment provision resulted in
the mutual fund segment incurring a loss of
$12.4 million. In 2013, this position was strongly
reversed and this segment recorded a profit
of $23.5 million. The company s decision to
close the Euro denominated income fund cer-
tainly helped the result.
Despite generating lower operating income,
the banking services segment produced a
strong increase in its pre-tax profit. This result
was helped by the significantly lower impair-
ment provision in 2013.
EPS and share price
AMBL s EPS improved from $1.73 in 2012
to last year s $3.11. The total dividend paid for
2013 amounted to $1.00. This was an improve-
ment over the $0.85 paid in respect of the
At its recent price of $38.49, investors would
enjoy a yield of 2.6 per cent.
APRIL 13 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG15
ANSA Merchant Bank Ltd 2013:
Overall positive results
Total assets expanded
by ten per cent to
reach $6.1 billion from
$5.5 billion as at
December 2012. Cash
and short-term funds
increased by $245.7
million to reach $1.05
billion from the
previous year's balance
of $806 million.
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