DESPITE a challenging year for Fiji, Merchant Finance Ltd recorded a healthy interest income of $20.2 million for financial year 2016 (FY16) compared with $18.9m last year.
This, according to the Fijian Holdings Ltd 2016 Annual Report, is 7 per cent increase in interest income was because of the rise in customer confidence in its loan products which resulted in the increase in loan book by 27 per cent compared with the previous year.
The increase was also driven by competition where the company had to offer competitive interest to keep their customers, attract new customers and support their growing demands.
“To fund our increasing loan book, we had to offer competitive term deposit rates to attract more customers. This resulted in the increase in interest expense by 24 per cent in financial year 2016 compared with prior year,” the report stated.
“Half way through the year, we also improved our provision methodology by increasing our security discounting factor, which in turn raised our loan impairment expense by 103 per cent from prior year. The end result was a profit of $9.39m this year compared with $10.02m previous year.”
To counteract the negative impact of tropical cyclones, the company introduced four new lending products under Trade Finance namely Agri Trade, Trade Export, Trade Local and Trade Import in March 2016.
“The products were launched together with our new company name changing from Merchant Finance & Investment Company Ltd to Merchant Finance Ltd with a new logo and official colours of wealth green and gold.
“We were prompted to introduce the new loan products as we wanted to provide as much financial assistance to support our customers, the general public and assist the economy recover as a whole.
“With four new products and a fresh image of the company our aim is to champion recovery and new beginnings for our customers.”
Looking ahead, Merchant Finance’s strategic direction is well on track.
“We will continue to roll out our four new loan products in the market adding to our current Trade Finance portfolio that is currently valued at $7m as at June 2016. We also plan to open new branches in Sigatoka and Rakiraki to bring our services closer to our customers.
“The upcoming financial year is highly anticipated to be a good year for Merchant Finance.
“Our drive is to keep delivering exceptional service and we will continue to improve our competitive edge to satisfy the evolving financial needs of the public.”
