Microfinance

Financiera Independencia reports 2Q10 results

Financiera Independencia a leading Mexican microfinance lender of personal loans to lower income segment individuals and working capital loans through group lending microfinance, has announced it’s results for the three-month period ending June 30, 2010.Financiera Independencia’s Net income for 2Q10 has increased by 4.9% YoY to Ps.143.5 million.financiera independencia results
Commenting on the results, Noel Gonzalez, Chief Executive Officer, said, “We are driving considerable growth in Finsol’s loan portfolio and client base, reflecting not only the availability of funding that we have secured for the business, but also the increased sales and marketing support. Also, we made progress on the operational efficiency side, reducing head count by 270 people, mainly in administrative positions, as we already consolidated our Human Resources and Finance organizations.”

“We are implementing additional actions to improve client retention and grow our core business, including the launching of a mass media campaign, and implementing further initiatives to facilitate access for our clients to make payments.”

Highlights of Financiera Independencia Results

Net income up 4.9% for the quarter and 12.3% for the first half, year-on-year. —

Total loan portfolio growth of 16.7% YoY, driven by a 15.2% increase in client base, mainly from CrediPopular and Finsol. —

Finsol’s total loans reached Ps.783.4 million in 2Q10, a 7.8% sequential growth from the Ps.726.7 million posted on 1Q10. —

Non-performing loans to total loans ratio improved to 11.2%, compared to 12.7% in 2Q09. —

NIM after provisions including fees of 42.6% in 2Q10 below the 48.9% in 2Q09, reflecting the effect of the surplus cash remaining from the US$200 million bond issue. For the first half of the year this ratio stood at 50.8% compared to 49.2% in 1H09. —

Provisions for loan losses in 2Q10 represented 32.5% of financial margin, compared with 40.0% in 2Q09, and 31.4% in 1Q10. —

Efficiency ratio was 80.5% in 2Q10, the increase mostly due to the integration of Finsol and its related non-recurring expenses for the quarter of Ps. 41.7 million. Excluding Finsol, the efficiency ratio improved to 71.9% in 2Q10 from 73.4% in 1Q10, and better than the 2009 quarterly average of 74.3%. —

Equity to total assets increased to 34.1% from 29.7% in 2Q09, and 27.2% in 1Q10. —

ROE in 2Q10 down to 19.8% from 24.4% in 1Q10 and 33.7% in 2Q09, mainly due to the Ps.850 million capital increase undertaken during 1Q10 to fund Finsol’s acquisition. For the first half of the year the ROE was 23.4%, compared to 32.7% in 1H09.

All financial figures discussed in this announcement are unaudited and are prepared in accordance with Mexican Banking Accounting Principles unless stated otherwise. Figures for 2009 and 2010 are expressed in nominal pesos.

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