REG - ASA Intnl. Grp PLC - March 2022 business update

ASA InternationalAnnouncement

26/04/2022 07:16

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220426:nRSZ2782Ja&default-theme=true

RNS Number : 2782J  ASA International Group PLC  26 April 2022

Press release

 

ASA International Group plc March 2022 business update

 

Amsterdam, The Netherlands, 26 April 2022 - ASA International, ('ASA
International', the 'Company' or the 'Group'), one of the world's largest
international microfinance institutions, today provides the following update
of the impact of Covid-19 on its business operations as at 31 March 2022.

·    Liquidity remains high with approximately USD 103m of unrestricted
cash and cash equivalents across the Group.

·    The pipeline of funding deals under negotiation totalled
approximately USD 205m.

·    With the exception of India and Myanmar, all other operating
subsidiaries continued to achieve collection efficiency of more than 90% with
9 countries achieving more than 95%.

·    India collections improved to 81%, despite the substantial overdue
collections and moratoriums provided to clients. Collection efficiency,
excluding instalments due from clients receiving the one-time loan
restructuring offered by the Reserve Bank of India ('RBI'), increased to 116%.

·    The benchmark PAR>30 for the Group, including off-book loans and
excluding loans overdue more than 365 days, remained broadly stable (from 6.8%
to 6.7%).

·    The PAR>30 for the Group's operating subsidiaries, excluding India
and Myanmar, remained at 1.9%.

·    Excluding all loans which have been overdue for more than 180 days
and, as a result, have been fully provided for, PAR>30 remained at 4.6%.

·    Disbursements as percentage of collections exceeded 100% in 10
countries. The decreasing percentage in India was primarily due to the
strategic decision to reduce disbursements.

·    With the number of clients broadly stable at 2.4m (slightly lower
than in February and 5% lower than in March 2021), the continuing strategic
focus in India on collections and the currency depreciation in Sri Lanka and
Ghana, Gross OLP decreased to USD 417m (2% lower than in February 2022 and 13%
lower than in March 2021).

·    The moratorium amount decreased to USD 21.7m, and is composed of the
restructured loans of certain distressed clients in India as per the RBI
guidelines. No other operating subsidiary granted moratoriums.

 

Health impact of COVID-19 on staff and clients

 

·    Since March 2020, the number of staff members confirmed as infected
by Covid increased to 561 of over 13,047 staff, with two deaths. Confirmed
infections amongst 2.4m clients increased to 22,864 from 22,791 in the
previous month, resulting in 698 deaths since the start of the pandemic. Of
the 698 client deaths across the Group, 452 took place in Myanmar, with one
death occurring in March 2022.

 

Funding

·    Unrestricted cash and cash equivalents remained high at approximately
USD 103m.

·    The Company secured approximately USD 19m of new loans from local and
international lenders in March 2022.

·    The majority of the Company's USD 205m pipeline of future wholesale
loans are supported by agreed term sheets and/or draft loan documentation. The
terms and conditions of the remaining loans are being negotiated with lenders.

Collection efficiency until 31 March 2022((1))

 Countries        Oct/21    Nov/21    Dec/21    Jan/22    Feb/22    Mar/22
 India            70%       69%       74%       76%       76%       81%
 Pakistan         99%       99%       99%       99%       100%      100%
 Sri Lanka        91%       92%       94%       93%       93%       94%
 The Philippines  97%       97%       97%       98%       98%       99%
 Myanmar          68%((2))  75%((2))  78%((2))  78%((2))  72%((2))  72%((2))
 Ghana            100%      99%       99%       99%       99%       100%
 Nigeria          96%       97%       96%       95%       96%       96%
 Sierra Leone     93%       92%       92%       92%       92%       94%
 Kenya            100%      100%      100%      99%       100%      100%
 Uganda           94%       98%       100%      100%      100%      100%
 Tanzania         100%      100%      100%      100%      100%      100%
 Rwanda           97%       97%       97%       97%       97%       97%
 Zambia           99%       99%       99%       100%      100%      98%
 ((1)) Collection efficiency refers to actual collections from clients divided
 by realizable collections for the period. It is calculated as follows: the sum
 of actual regular collections, actual overdue collections and actual advance
 payments divided by the sum of realizable regular collections, actual overdue
 collections and actual advance payments. Under this definition collection
 efficiency cannot exceed 100%.

 ((2)) Collections are impacted by the ongoing lockdowns and civil unrest in
 some areas of our operations.

 

·    Collection efficiency across the Group increased or remained broadly
stable compared to the previous month in all countries.

·    Collections in India improved to 81%, despite the substantial overdue
collections and moratoriums provided to clients. Collection efficiency,
excluding instalments due from clients receiving the one-time loan
restructuring, increased to 116%.

·    Collection efficiency in India, including regular and overdue
collections as well as advance payments, increased to 113% as a percentage of
the regular, realizable collections, including advance payments. The
substantial difference is due to the Group's policy that any loan instalment
paid is first credited against the oldest outstanding amount overdue. This has
an adverse impact on India's monthly collection efficiency, which is further
aggravated by the relatively long duration of the loans disbursed in India.
This adjusted collection efficiency metric illustrates that most clients in
India continue to make payments on their loans due.

 

 

Loan portfolio quality up to and including March 2022((3, 4, 5) )

                 Gross OLP (in USDm)                                                   Non-overdue loans              PAR>30 less PAR>180
                Jan/22                Feb/22                Mar/22                    Jan/22   Feb/22   Mar/22       Jan/22      Feb/22      Mar/22
 India (total)        111                   107                   103                 68.8%    69.7%    70.1%        11.1%       10.2%       9.3%
 Pakistan               81                    83                    83                99.7%    99.7%    99.7%        0.2%        0.2%        0.2%
 Sri Lanka                8                     8                     6               85.3%    85.9%    86.7%        3.9%        4.1%        4.0%
 Philippines            46                    47                    47                94.9%    95.7%    96.3%        2.0%        1.9%        1.6%
 Myanmar                21                    21                    21                64.3%    58.5%    57.7%        1.0%        22.7%       29.3%
 Ghana                  46                    44                    41                99.2%    99.3%    99.3%        0.3%        0.2%        0.2%
 Nigeria                37                    37                    37                90.9%    90.6%    90.3%        3.4%        3.6%        3.9%
 Sierra Leone             7                     7                     7               72.3%    71.1%    65.8%        6.5%        7.1%        6.8%
 Kenya                  17                    18                    18                98.6%    98.6%    98.6%        0.5%        0.6%        0.5%
 Uganda                 10                    10                    11                90.7%    91.7%    92.9%        1.9%        0.9%        0.4%
 Tanzania               36                    37                    38                99.1%    99.1%    99.1%        0.2%        0.1%        0.2%
 Rwanda                   3                     3                     3               92.6%    92.4%    93.1%        3.0%        3.2%        3.1%
 Zambia                   2                     2                     2               98.2%    97.7%    96.8%        0.5%        0.8%        1.1%
 Group                425                   424                   417                 87.5%    87.7%    87.9%        3.8%        4.6%        4.6%

( )

                 PAR>30                      PAR>90                      PAR>180
                Jan/22  Feb/22  Mar/22      Jan/22  Feb/22  Mar/22      Jan/22  Feb/22  Mar/22
 India (total)  19.3%   17.1%   15.4%       11.6%   9.9%    8.7%        8.2%    6.9%    6.2%
 Pakistan       0.2%    0.2%    0.2%        0.2%    0.1%    0.1%        0.0%    0.0%    0.0%
 Sri Lanka      6.6%    6.9%    6.6%        4.0%    4.3%    4.2%        2.8%    2.8%    2.6%
 Philippines    2.5%    2.7%    2.8%        1.9%    2.0%    2.1%        0.6%    0.8%    1.2%
 Myanmar        1.6%    23.3%   29.8%       1.0%    0.9%    1.0%        0.6%    0.5%    0.5%
 Ghana          0.3%    0.3%    0.3%        0.2%    0.2%    0.2%        0.1%    0.1%    0.1%
 Nigeria        5.4%    5.8%    6.2%        3.6%    3.8%    4.0%        2.0%    2.2%    2.3%
 Sierra Leone   8.7%    9.5%    9.5%        5.5%    6.2%    6.8%        2.2%    2.4%    2.7%
 Kenya          1.0%    1.1%    1.0%        0.8%    0.8%    0.7%        0.5%    0.5%    0.4%
 Uganda         2.9%    2.4%    2.0%        2.8%    2.3%    1.9%        0.9%    1.4%    1.6%
 Tanzania       0.4%    0.4%    0.4%        0.4%    0.3%    0.3%        0.3%    0.3%    0.2%
 Rwanda         4.8%    5.1%    5.1%        3.2%    3.3%    3.5%        1.8%    1.9%    2.0%
 Zambia         0.8%    1.1%    1.4%        0.5%    0.5%    0.6%        0.2%    0.3%    0.3%
 Group          6.4%    6.8%    6.7%        4.0%    3.5%    3.1%        2.6%    2.2%    2.1%
 ( )

 ((3) ) Gross OLP includes the off-book BC and DA model, excluding interest
 receivable and before deducting ECL provisions and modification loss.

 ((4) ) PAR>x is the percentage of outstanding customer loans with at least
 one instalment payment overdue x days, excluding loans more than 365 days
 overdue, to Gross OLP including off-book loans. Loans overdue more than 365
 days now comprise 3% of the Gross OLP.

 ((5) ) The table "PAR>30 less PAR>180" shows the percentage of
 outstanding client loans with a PAR greater than 30 days, less those loans
 which have been fully provided for.

·    PAR>30 for the Group remained broadly stable (from 6.8% to 6.7%).

·    Credit exposure of the India off-book BC portfolio of USD 33.7m is
capped at 5%. The included off-book DA portfolio of USD 1.6m has no credit
exposure.

 

Disbursements vs collections of loans until 31 March 2022((6) )

 Countries        Oct/21  Nov/21  Dec/21  Jan/22  Feb/22  Mar/22
 India            39%     85%     88%     78%     65%     62%
 Pakistan         100%    98%     100%    100%    96%     100%
 Sri Lanka        86%     100%    113%    70%     115%    122%
 The Philippines  90%     90%     81%     80%     93%     104%
 Myanmar          73%     90%     95%     99%     99%     116%
 Ghana            111%    114%    108%    74%     110%    115%
 Nigeria          128%    134%    93%     71%     98%     98%
 Sierra Leone     112%    112%    110%    97%     102%    113%
 Kenya            96%     103%    55%     95%     101%    113%
 Uganda           115%    121%    69%     81%     112%    118%
 Tanzania         107%    109%    107%    114%    112%    110%
 Rwanda           101%    105%    98%     65%     80%     107%
 Zambia           110%    111%    109%    76%     80%     109%
 ((6)) Disbursements vs collections refers to actual loan disbursements made to
 clients divided by total amounts collected from clients in the period.

·    Disbursements as percentage of collections exceeded 100% in 10
countries. The decreasing percentage in India was primarily due to the
strategic decision to reduce disbursements.

 

Development of Clients and Outstanding Loan Portfolio( )until 31 March 2022

                   Clients (in thousands)           Delta                         Gross OLP (in USDm)           Delta
 Countries        Mar/21     Feb/22     Mar/22     Mar/21-Mar/22  Feb/22-Mar/22  Mar/21    Feb/22    Mar/22    Mar/21-Mar/22 USD  Mar/21-Mar/22 CC ((7))  Feb/22-Mar/22 USD
 India            737        498        476        -35%           -4%            180       107       103       -43%               -41%                    -4%
 Pakistan         442        530        541        22%            2%             74        83        83        11%                33%                     -1%
 Sri Lanka        58         52         52         -9%            1%             9         8         6         -37%               -7%                     -29%
 The Philippines  319        295        299        -6%            2%             53        47        47        -11%               -5%                     0%
 Myanmar          131        111        112        -14%           0%             30        21        21        -28%               -9%                     2%
 Ghana            155        161        162        5%             1%             47        44        41        -11%               15%                     -6%
 Nigeria          258        245        241        -6%            -2%            33        37        37        13%                23%                     0%
 Sierra Leone     39         43         42         6%             -2%            5         7         7         31%                52%                     2%
 Kenya            102        120        123        20%            2%             15        18        18        24%                30%                     4%
 Uganda           83         93         95         15%            1%             8         10        11        29%                26%                     5%
 Tanzania         133        185        190        43%            3%             24        37        38        59%                60%                     3%
 Rwanda           18         18         18         -1%            -1%            3         3         3         21%                25%                     3%
 Zambia           7          16         16         133%           4%             0.6       2         2         253%               188%                    1%
 Total            2,481      2,368      2,368      -5%            -0.01%         480       424       417       -13%               -3%                     -2%

( )

((7)) Constant currency ('CC') implies conversion of local currency results to
USD with the exchange rate from the beginning of the period.

·    With the number of clients broadly stable at 2.4m, the continuing
strategic focus in India on only collections and the currency depreciation in
Sri Lanka and, Ghana Gross OLP decreased to USD 417m (2% lower than in
February 2022 and 13% lower than in March 2021).

 

Selected moratoriums((8)) on loan repayments until 31 March 2022

             Clients under moratorium (in thousands)
 Countries  Jan/22          Feb/22          Mar/22          As % of Total Clients
 India      205             205             205             43%
 Group      205             205             205             9%

 

             Moratorium amounts (USD thousands)
 Countries  Jan/22         Feb/22         Mar/22          March Moratoriums as % of OLP    As % of Total Moratoriums
 India      25,894         23,730         21,705         21%                              100%
 Group      25,894         23,730         21,705         5%                               100%

( )

((8)) Moratoriums relate to clients who have received an extension for the
payment of one or more loan instalments during the month.

·    Moratoriums on loan repayments relate primarily to approximately 43%
of clients in India, who accepted to benefit from the one-time debt
restructuring scheme established by the RBI and confirmed in September 2021.
See RBI Covid-19 Restructuring Guidelines
(https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12086&Mode=0) .

·    The moratorium amount across the Group decreased to USD 21.7m, which
represents 5% of the Group's Gross OLP.

Key events in April 2022

·    In Sri Lanka measures have been taken including restricting loan
sizes in order to prevent clients from over-borrowing due to the economic
crisis.

·    Other than the existing partial lockdown and curfews in Myanmar, the
Company is not aware of any further restrictions implemented in its operating
countries as a result of the emergence of the Omicron variant up until 21
April 2022.

 

Please note that, while the Company's operational performance appears to
gradually normalize in most countries except for India and Myanmar, the risk
of additional challenges to our operations should not be underestimated, due
to (i) the still relatively high infection rates, (ii) the current lack of
available vaccines as well as vaccine hesitancy in most of our operating
countries, (iii) the risk of the introduction of more infectious Covid
variants in our operating countries, and (iv) the associated disruption this
may cause to the businesses of our clients.

Enquiries:

ASA International Group plc

Investor
Relations
 
             +31 6 2030 0139

Véronique
Schyns
                vschyns@asa-international.com
(mailto:vschyns@asa-international.com)

 

About ASA International Group plc

ASA International Group plc (ASAI: LN) is one of the world's largest
international microfinance institutions, with a strong commitment to financial
inclusion and socioeconomic progress. The company provides small, socially
responsible loans to low-income, financially underserved entrepreneurs,
predominantly women, across South Asia, South East Asia, West and East Africa.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFLFLTSDIEFIF