QUARTER RESULTS: Equity Assurance, Fortis Microfinance.


EQUITY ASSURANCE PLC: ASSURED STRESS.

If nothing else, Equity Assurance PLC was assured of one thing as the quarter to March drew to a close: Year 2016 could be full of stress. That is, if the period's figures are anything to go by.

According to the results, only three developments brought smiles to faces within the period.

Firstly, reinsurance decreased by 9.87% to N225.5m ahead of only 0.58% drop in gross premium income to N1119.3m.

Secondly, gross claims recovered more than doubled to N130m as gross claims increased only by 86.7% to N427.6m thus leading to only 77% rise in net claims.

For a third, Other operating income had a solo run amongst the various income streams by leaping to N78.4m from N28.9m same time in 2015.

Otherwise, it would have been assured stress all the way. This was because, aside from the marginal drop in premium income, fee and commission went down by 11.6% to N32.8m, underwriting expenses grew by 44% to N539.6m, and investment income also eased by 1.4% to N120m.

Along the same pressure route, finance cost increased by 13.7% to N51.5m, Other operating expense grew by 45% to N453.3m and fair value loss on financial assets expanded to N20.9m from N4.64m previously.

In the end, profit before tax was not in sight for Equity Assurance within the quarter, it had to settle for N89.3m loss compared to N161.9m  profit by March 2015.

EQUITY ASSURANCE PLC: (Nm)
                       First quarter
                            2016.           2015
Total income.     1411.1.      1384.6
Premium income 1119.3.    1125.8
Reinsurance.          225.5.      250.2
Fee and comm.      32.8.         37.1
Gross claims.       427.6.       229.0
Claims recovered 130.0.         60.8
Underwriting exp. 539.6        374.7
Non insurance inc.  60.6.        70.7
Investment income 120.0.     121.7
Fair value gain        (20.9).    ( 4.64)
Other Op. Income    78.4.       28.9
Employees benefit  195.1     234.6
Impairment.              14.5.        -
Other Op expenses 453.3.     312.7
Finance cost             51.5.        45.3
Profit before tax.     (89.3).      161.9

FORTIS MICROFINANCE BANK PLC: WEAK FORTRESS

Fortis Microfinance Bank PLC apparently tried to build a fortress of sorts in the quarter to March 2016 within which to grow profit but alas, it was not strong enough.
According to the results for the period, total income had increased by 11.3% to N802.5m principally because interest income rose by 17.9% to N667.8m.

However the joy in that fizzled out very quickly as interest expense closed 59.8% up at N483.6m depressing net interest income by 30.2% to N184.1m.

Then fee and commission income decreased by 11.2% to N129.3m even as its related expense jumped to N14m from N3.71m and other operating income dropped by 40% to N5.44m.

Naturally, these were too much for the fortress Fortis tried to build by controlling overheads. The control led to 7.71% decline in administration expenses to N83.8m  and 3.21% drop in personnel cost to N102.5m.

Hence, with impairment provision being the only other support by going down 57.4% to N7.03m, Fortis Microfinance Bank's profit went down by 55.3% to N102.7m within the quarter.

Thus dragging its profit margin from very comfortable 31.9% in March 2015, to a far weaker 12.8%.

FORTIS MICROFINANCE BANK Nm
                        First quarter
                         2016.             2015
Total income. 802.5.            721.1
Interest income 667.8.         566.4
Interest exp.       483.6.         302.7
Net interest         184.1         263.8
Impairment.          7.03.          16.5
Fee & comm.      129.3.        145.6
Commission exp. 14.0.          3.71
Other op. Income  5.44.         9.07
Personnel.            102.5.      105.9
Administration.     83.8.        90.8
Profit before tax  102.7.      229.9
Profit margin %     12.8.       31.9

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