Review of the Performance of the Company and its Principal Subsidiaries
The Group recorded a profit after tax of $1.7 million for the first quarter ended 31 March 2017, an improvement compared to $0.3 million for the same period last year. The stronger performance was mainly attributed to lower operating expenses and a net write-back of loan allowances.
Profit from operations before allowances was $1.9 million, $0.5 million or 39.3% higher vis-àvis the same period last year. Net interest income contracted by $0.4 million or 6.7% primarily due to lower loan volume and yield, partly cushioned by decline in interest expense. The drop in net interest income was compensated by higher non-interest income particularly gain on sale of investments and lower total operating expenses owing to the strict discipline in the management of operating costs in the light of lower interest income.
In the current weak economic climate, the Group's total loan net of allowances dipped 3.9% to $806 million compared to $838 million as at 31 December 2016. Meanwhile, total deposits increased marginally by $4 million or 0.5% to $861 million as at 31 March 2017.
With the drop in total loan during the period, there was a write-back of collective allowances, resulting in a $0.1 million net write-back for loan allowances. For the same period last year, there was a net charge for loan allowances of $1.0 million.
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.