Review of the Performance of the Company and its Principal Subsidiaries
The Group recorded a profit after tax of $1.8 million for the third quarter ended 30 September 2017 compared to $0.5 million for the same period last year. The stronger performance was mainly attributed to higher total income, lower total operating expenses and lower allowances for loan losses.
Profit from operations before allowances was $2.6 million, $1.1 million or 76.5% higher vis-à the same quarter last year. Net interest income increased by $0.6m or 12.7% as the decline in interest expense outweighed the drop in interest income. Total operating expenses were well managed, with the decline of $0.6 million or 15.4% coming largely from other operating expenses and staff costs.
For the nine months ended 30 September 2017, the Group's operating profit before allowances was $6.8 million, compared to $4.9 million during the same period last year. This is chiefly attributed to a decline in operating expenses by $1.7 million or 14.1%.
In the current weak economic climate, the Group's total loan net of allowances dipped 7.9% to $772 million compared to $838 million as at 31 December 2016. In tandem with the lower loan balance, total customers' deposits was managed downwards by 1.2% to $847 million as at 30 Sep 2017. Net write-back for loan losses amounted to $0.2 million for the nine months ended 30 Sep 2017 compared to net charge for loan allowances of $3.3 million for the same period last year. The Group continues to set aside adequate individual and collective allowances for its loan portfolio.
In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen which is likely to affect substantially the results of the operations of the Group and the Company in the interval between the end of the financial period and the date of this announcement.