(Alliance News) - Manx Financial Group PLC on Friday said profit fell sharply in the first half of 2020 due to a more substantial impairment on loans to customers, as well as higher expenses.
Shares in Manx Financial were down 4.2% at 8.00 pence in London shortly before midday.
The Isle of Man-based financial services firm, which owns Conister Bank Ltd among others, reported a pretax profit of GBP1.0 million for the six months ended Jun 30, down 29% from GBP1.4 million the year before.
This stemmed, in large part, from a GBP1.9 million impairment on loans and advances to customers, versus a smaller GBP1.5 million impairment the year before.
In addition, personnel expenses rose to GBP3.3 million from GBP3.1 million and other expenses rose to GBP1.8 million from GBP1.7 million. Depreciation increased to GBP425,000 from GBP281,000 as well.
Net interest income fell to GBP7.8 million from GBP8.9 million but higher fee and commission income, as well as lower fee and commission expense, meant that net trading income was 3.8% higher at GBP8.1 million from GBP7.8 million.
Executive Chair Jim Mellon said: "The board's fundamental objective continues to be that of increasing shareholder value, both in a prudent yet progressive manner. Having started the year in great shape, we have undertaken a number of initiatives to minimise and respond to the demands of dealing with the effects of Covid-19 and are lucky to have a diverse range of financial services upon which we can rely."
In discussing the firm's outlook, Mellon said "the Isle of Man economy is bearing up well under the strain of Covid-19" so far with no signs of diminishing growth from local new business. However, the UK is less certain with its biggest quarterly gross domestic product decline on record at 20.4% in the second quarter of the year.
"It is difficult for me to provide a clear steer as to our full-year outcome in this changing environment. We have, however, started the beginning of the year in great shape and we are lucky in having a diverse range of financial services upon which to rely. I am also confident that worthwhile acquisition opportunities will emerge during the inevitable shake-out to come," Mellon commented.
The company is now in advance talks with its financial advisors on implementing a dividend scheme, full details of which are expected before the end of 2020.
By Anna Farley; annafarley@alliancenews.com
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Manx Financial (MFX)