Review of the Performance of the Company and its Principal Subsidiaries
The Group recorded a profit after tax of $4.9 million for the financial year ended 31 December 2017, an improvement of 79.7% compared to $2.7 million for the same period last year. The stronger performance was mainly attributed to higher total income and lower total operating expenses.
Total income improved by $0.8 million or 3.7% as net interest income increased $1.3 million or 6.7% partly offset by lower non-interest income by $0.5 million or 18.6%. Net interest income increased as the decline in interest expense outweighed the drop in interest income while noninterest income dropped mainly due to decline in fees and commissions income. Total operating expenses were well managed, with the decline of $1.5 million or 9.7% coming largely from other operating expenses and depreciation charge on fixed assets.
The Group's total loan net of allowances dipped 10.9% to $747 million as at 31 December 2017 compared to $838 million as at 31 December 2016. In line with the lower loan balance, the Group has also actively managed the total deposits downwards by 5.7% to $808 million as at 31 December 2017. Net allowances for loan losses amounted to $3.5 million for the year ended 31 December 2017. For the same period last year, there was a net charge for loan allowances of $3.9 million. The Group continues to set aside adequate specific and collective allowances for the 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 year and the date of this report.