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Highlights
- Net Profit Surge: ASA International expects a net profit of approximately USD 24m for 2024, a significant increase from USD 8.8m in 2023.
- Loan Portfolio Growth: The Group's loan book grew by 9% in Q4 2024, driven by strong demand in key markets, including Pakistan, Ghana, Kenya, Tanzania, and Uganda.
- Dividends Resumed: ASA International resumed its dividend policy with an interim dividend of USD 0.03 per share, reflecting strong financial performance.
ASA International Group plc (LSE:ASAI), one of the world's largest microfinance institutions, has reported a robust trading update for the three-month period ended 31 December 2024. The Group delivered impressive growth in its net profit, client base, and loan portfolio, overcoming challenges such as the impact of hyperinflation accounting in Ghana and Sierra Leone.
Profitable Year with Strong Q4 Performance
On a preliminary unaudited basis, ASA International expects to report a net profit of approximately USD 24 million for 2024, a notable increase compared to USD 8.8 million in 2023. This growth was achieved despite the ongoing negative impact of hyperinflation accounting in Ghana and Sierra Leone. The Group’s strong operational performance in Q4 continued the positive momentum seen throughout the year, with a 9% growth in its gross outstanding loan portfolio (OLP), reaching USD 458 million as of 31 December 2024. This represents a 22% year-on-year increase.
Expansion and Quality Maintenance
The growth in ASA International’s loan book was primarily driven by increased demand from clients in key markets, including Pakistan, Ghana, Kenya, Tanzania, and Uganda. The Group's client base also expanded by 3% in Q4, reaching 2.5 million clients. Despite this growth, ASA International maintained high portfolio quality. The Group's PAR>30 (portfolio at risk) improved slightly to 2.2% as of 31 December 2024, compared to 2.3% at the end of Q3 2024. Notably, portfolio quality in countries like Nigeria, Rwanda, and Sri Lanka showed improvement, while Pakistan, Ghana, Kenya, Uganda, and Myanmar reported outstanding portfolio quality with PAR>30 of less than 0.5%.
Looking Ahead: Hyperinflation Impact to Decline
ASA International expects that only Sierra Leone will continue to face hyperinflationary accounting in 2025, with Ghana projected to no longer meet the criteria for hyperinflation accounting. This shift would significantly reduce the impact of hyperinflation accounting on the Group's financials in 2025, providing a more stable outlook for the year.
Strategic Decisions and Digital Transformation
On 16 January 2025, ASA India announced its decision to surrender its microfinance license due to ongoing financial challenges, including liquidity concerns and lender defaults. The decision to exit the Indian market aligns with ASA International’s broader strategy of divesting non-profitable operations. Additionally, all banks in Pakistan, including ASA Pakistan, have received instructions from the State Bank of Pakistan to prepare plans for transitioning to Islamic banking.
ASA International’s digital transformation remains on track, with the planned rollout of a new core banking system and a digital financial services app in Ghana and Tanzania scheduled for the second half of 2025.
Resumption of Dividends
Reflecting its strong financial performance, ASA International resumed its dividend policy on 5 December 2024, announcing an interim dividend of USD 0.03 per share. The Group is expected to announce the final 2024 dividend alongside its full-year results on 24 April 2024.
