Sing Investments & Finance : Second Quarter Financial Results 2021

Sing Investments & Finance Ltd

(Incorporated in the Republic of Singapore)

HEAD OFFICE

96 Robinson Road #01-01 SIF Building Singapore 068899 Tel: [phone] Fax: [phone] www.sif.com.sg

Co Reg. No. 196400348D

SING INVESTMENTS & FINANCE LIMITED

HALF YEAR 2021

INTERIM RESULTS ANNOUNCEMENT

Sing Investments & Finance Ltd

(Incorporated in the Republic of Singapore)

HEAD OFFICE

96 Robinson Road #01-01 SIF Building Singapore 068899 Tel: [phone] Fax: [phone] www.sif.com.sg

Co Reg. No. 196400348D

Table of Contents
	PAGE
Performance Highlights	1
Review of Performance	2
Significant Trends and Competitive Conditions in the Industry	2
Other Information Required by SGX Listing Rule Appendix 7.2	3
Condensed interim consolidated statement of profit or loss	4

Condensed interim consolidated statement of profit or loss and other comprehensive income

comprehensive income		5
Condensed interim statements of financial position		6
Condensed interim consolidated statement of cash flows		7
Condensed interim statements of changes in equity	8	- 9
Notes to the condensed interim consolidated financial statements	10	- 23

PERFORMANCE HIGHLIGHTS

	1st Half	1st Half	Variance
	2021	2020
	$'000	$'000	+/(-) (%)
Summary Statement of Profit & Loss Items
Interest income and hiring charges	37,148	43,092	(13.8)
Interest expense	(7,901)	(21,048)	(62.5)
Net interest income	29,247	22,044	32.7
Non-interest income	3,474	4,193	(17.1)
Total Income	32,721	26,237	24.7
Operating Expenses	(13,188)	(13,516)	(2.4)
Profit from operations before allowances	19,533	12,721	53.5
Write-back / (Allowances for) credit losses on loans and other assets	2,549	(3,348)	NM
Profit before income tax	22,082	9,373	135.6
Profit after tax attributable to equity holders of the group	18,338	8,044	128.0
Other comprehensive income	(3,347)	4,725	NM
Total comprehensive income	14,991	12,769	17.4
Selected Balance Sheet Items	As at 30 Jun 2021	As at 31 Dec 2020
Total Equity	396,780	387,464	2.4
Total Assets	2,989,036	2,850,450	4.9
Loans and advances	2,250,514	2,077,683	8.3
Deposits and saving accounts of customer	2,364,937	2,278,708	3.8
Key Financial Ratios	%	%
Net Interest Margin	2.15	1.57
Non interest income to total income	10.6	16.0
Cost-to income ratio	40.3	51.5
Loans to deposit ratio 1	86.7	84.6
Non-performing loans ratio	2.7	2.8
Return on Equity 2	9.2	4.2
Return on Asset 3	1.2	0.6
Capital Adequacy Ratio	15.1	16.3
Per Ordinary Share Data
Basic earnings per share (cents)	23.27	10.21
Net asset value per share ($)	2.52	2.46

1. Loans- excluding those funded by Monetary Authority of Singapore
2. Return on equity is computed based on ordinary shareholders' equity at balance sheet date
3. Return on assets is computed based on total assets at balance sheet date

NM: Not meaningful

1. Interim Results - Not Audited or reviewed

The condensed interim Group's financial statements and the Company's statement of financial position and statement of changes in equity for the half year ended 30 June 2021 and explanatory notes have not been audited or reviewed.

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2. Review of Performance

The Group registered a strong performance for the first half of 2021. Profit from operations before allowances improved by 53.5%, whilst net profit after tax grew by 128.0% to $18.3 million, driven largely by higher net interest income, as well as write back in loan allowances vis-à-vis a net allowance charge a year ago.

Operating profit benefited from the lower funding costs in the current low interest environment, which contributed to an increase of $7.2 million or 32.7% in net interest income. Net interest margin rose by 58 basis points to 2.15%. Non-interest income declined, as compared to the same period in 2020, mainly due to lower government COVID 19 related grants received in the first half of 2021, as a result of an improving economic environment. Total operating expenses were well contained, which resulted in a sharp reduction in cost-to-income ratio to 40.3% for the period under review as compared with 51.5% in the same period a year ago.

The Group wrote back $2.5 million of loan allowances in the first six months of 2021, as compared to a $3.3 million net charge during the first half of 2020. The write back came primarily from the general allowances for the non-impaired assets, as macroeconomic conditions and outlook improved over the last year.

The decline in Other Comprehensive Income of $3.3 million during the first half of 2021 was attributed primarily to the decline in fair value of Singapore Government Securities ("SGS") bonds. The Group purchases SGS as part of its liquid assets for the purpose of maintaining the minimum liquid asset required under the Finance Companies Act.

Total loans and advances grew by $172.8 million or 8% during the half year, from $2,077.7 million as at 31 December 2020 to $2,250.5 million as at 30 June 2021. In tandem with the growth in loan balances, customers' deposits also increased by 3.8% to $2,364.9 million as at 30 June 2021 compared to 31 December 2020.

The Group's Capital Adequacy Ratio remains healthy at 15.1% as at 30 June 2021. The decline in the ratio from 16.3% from 31 December 2020 was primarily due to the dividend payout made during the 2nd Quarter of 2021 for the last financial year.

3. Comments on Significant Trends and Competitive Conditions in the Industry

According to the Ministry of Trade and Industry ("MTI")'s advance GDP estimates on 14 July 2021, the Singapore economy grew by 14.3% on a year-on-year basis in the second quarter of 2021, extending the 1.3% growth in the previous quarter. The strong growth was largely due to the low base in the second quarter of 2020, when GDP fell by 13.3% due to the Circuit Breaker (CB) measures implemented from 7 April to 1 June 2020. In absolute terms, GDP in the second quarter of 2021 remained 0.9% below its pre-pandemic level in the second quarter of 2019.

On a quarter-on-quarterseasonally-adjusted basis, the Singapore economy contracted by 2.0% in the second quarter of 2021, a reversal from the 3.1% growth in the preceding quarter.

Although the official forecasted GDP growth for 2021 is expected to be within the range of 4% to 6%, the recovery across the different sectors are expected to be uneven. The construction sector as well as tourism-related services continue to be severely affected by border and safe measure restrictions. The recent spike in COVID cases caused by the Delta variant continues to pose a great challenge to the re-opening of our borders and the economy, even as the mass vaccination programme is being rolled out.

Against this backdrop, the Group continues to be supportive of MAS' and ESG's initiatives to help our customers pull through these difficult times. The Group will continue to be vigilant in our risk management, proactive in our management of net interest margin, and invest in our digital transformation, so as to be better prepared to capture opportunities going forward.

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Other Information Required by SGX Listing Rule Appendix 7.2

1. Changes in the Company's share capital arising from rights issue, bonus issue, share buy backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for other purpose since the end of the previous period reported.
   There has been no change in the Company's share capital arising from the above issues.
   As at the end of the financial period, there were no outstanding convertibles (30 June 2020: Nil).
2. Sales, transfers, disposal, cancellation and /or use of treasury shares as at the end of the financial period.
   Not Applicable. During the financial period, no shares were held as treasury shares.
3. Shareholders' mandate for interested party transactions ("IPT")

The Group has not sought any shareholders' mandate for IPTs pursuant to Rule 920 of the SGX-ST Listing Manual nor does it have any IPTs (30 June 2020: Nil).

7. SGX-ST Listing Manual Rule 720(1) - Procurement of undertakings to comply with listing rules from all directors and executive officers

Pursuant to Rule 720(1) of the SGX-ST Listing Manual, the Company has procured undertakings to comply with the Exchange's listing rules from all its directors and executive officers.

By order of the Board

Lee Sze Leong

Managing Director

27 July 2021

8. Directors' Confirmation

The Directors confirm that, to the best of their knowledge, nothing has come to the attention of the Board of Directors which may render the Group's unaudited financial statements and the Company's statement of financial position and statement of changes in equity for the half year ended 30 June 2021 to be false or misleading.

On behalf of the Board of Directors

Lee Sze Leong

Managing Director

27 July 2021

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