Financiera Independencia continues to deliver consistent
results during the first quarter
Mexico City, April 25th, 2024.- Financiera Independencia, S.A.B. de C.V., SOFOM, E.N.R. (BMV: FINDEP; OTC: FNCRY), ("FINDEP" or the "Company") the leader in bringing financial inclusion to underserved Hispanic communities of North America through responsible lending and insurance products, announced today its results for the three months ended March 31st, 2024.
- Reported Net Profit for the whole year was Ps. 179 million, 9% higher YoY.
- Total Loan Portfolio closed at Ps. 7.5 billion, a 7% YoY reduction. Under a constant FX basis, the portfolio would have decreased 3% YoY. Our US operations currently represent 35% of our portfolio.
- Consolidated NPL ratio, measured as Stage 3 loan portfolio over total portfolio, stood at 5.7% in 1Q24, 60 basis points below 4Q23, and 80 basis points below the 6.5% from twelve months ago.
- Net Interest Income closed at Ps. 1.0 billion, 3% lower than 1Q23.
- Income Before Taxes in 1Q24 increased Ps. 11 million, or 5%, YoY. This is composed by an decrease of Ps. 25 million in Revenues, and a Ps. 3 million decrease in Operating expenses, offsetting the increase in Provision for Loan Losses (Ps. 45 million) and Interest Expense (Ps. 15 million).
- The Provision for Loan Losses was Ps. 289 million in 1Q24, a 14% YoY increase. Annualized PLL to average loans decreased from 16% to 15% YoY.
- Write-offs reached Ps. 368 billion in 1Q24, 15% lower YoY. Compared to the trailing-twelve-month average portfolio, trailing twelve months write-offs increased from 18 to 20%.
- Non-interestExpense, decreased 0.4% YoY in 1Q24, with costs as a percentage of average portfolio at 34%.
- Net Debt declined 22% YoY from Ps. 3.8 billion in 1Q23 to Ps. 3.0 billion in 1Q24. On a neutral FX basis, net debt declined 19% YoY.
- Cash and Cash Equivalents closed the quarter at Ps. 782 million, 29% below YoY and 6% QoQ.
- The Company's Return on Equity decreased 0.6 percentage points from 13.9% in 1Q23 to 13.4% in 1Q24, and the Return on Assets reached 6.8% in 1Q24, up from 5.8% in 1Q23. Return on Tangible Equity decreased from 17.7% in 1Q23 to 16.5% in 1Q24.
FINANCIERA INDEPENDENCIA | 1Q24
MESSAGE FROM THE CEO
With a strong start to 2024, all of our businesses continue to deliver consistent results in the first quarter of the year.
Our balance sheet recorded Ps. 10.5 billion in Total Assets and Ps. 782 million in cash and cash equivalents. Net debt of Ps. 3.0 billion, declined 22% versus the first quarter of last year. The Company's equity-to-asset ratio of 51% at quarter end was 7.8 percentage points above the same time last year.
Our Loan Portfolio of Ps. 7.5 billion decreased 3% YoY under a constant FX rate with loan originations in the first quarter of Ps. 1.1 billion pesos, increasing 5% under a constant FX compared to the prior year. Origination activities continue to reflect our prudent stance in the context of the prevailing macroeconomic environment.
Our digital transformation remains our top priority helping us to drive operational efficiencies across processes and workstreams ultimately improving the service we can provide to our customers and the quality of our results.
We remain committed to our strategy of focusing on our core business in our strategic markets, leveraging our expertise in credit analysis and loan origination while prudently managing the balance sheet through macroeconomic cycles.
Eduardo Messmacher
Chief Executive Officer
FINANCIERA INDEPENDENCIA | 1Q24
1Q24 CONSOLIDATED RESULTS
Table 1: Financial & Operational Highlights
1Q24 | 1Q23 | % | 3M24 | 3M23 | % | |
Income Statement Data | ||||||
Net Interest Income after Provisions* | 739.3 | 720.2 | 2.6% | 739.3 | 720.2 | 2.6% |
Net Operating Income (Loss)* | 249.6 | 238.9 | 4.5% | 249.6 | 238.9 | 4.5% |
Net Income (Loss)* | 178.6 | 166.1 | 7.6% | 178.6 | 166.1 | 7.6% |
Total Shares Outstanding (million) | 337.5 | 337.5 | 0.0% | 337.5 | 337.5 | 0.0% |
Earnings (Loss) Per Share | 0.5292 | 0.4920 | 7.6% | 0.5292 | 0.4920 | 7.6% |
Profitability & Efficiency | ||||||
NIM before Provisions Excl. Fees | 49.4% | 44.9% | 4.5 pp | 49.4% | 44.9% | 4.5 pp |
NIM after Provisions Excl. Fees | 35.5% | 30.7% | 4.8 pp | 35.5% | 30.7% | 4.8 pp |
NIM after Provisions Incl. Fees | 42.9% | 37.7% | 5.2 pp | 42.9% | 37.7% | 5.2 pp |
ROA | 6.8% | 5.8% | 0.9 pp | 6.8% | 5.8% | 1 pp |
ROE | 13.4% | 13.9% | -0.6 pp | 13.4% | 13.9% | -0.6 pp |
Efficiency Ratio Incl. Provisions | 72.1% | 73.0% | -1 pp | 72.1% | 73.0% | -1 pp |
Efficiency Ratio Excl. Provisions | 54.5% | 53.0% | 1.4 pp | 54.5% | 53.0% | 1.4 pp |
Operating Efficiency | 24.4% | 22.7% | 1.7 pp | 24.4% | 22.7% | 1.8 pp |
Fee Income | 13.7% | 13.2% | 0.4 pp | 13.7% | 13.2% | 0.4 pp |
Capitalization | ||||||
Equity to Total Assets | 51.0% | 43.2% | 7.9 pp | 51.0% | 43.2% | 7.9 pp |
Credit Quality Ratios | ||||||
NPL Ratio | 5.7% | 6.5% | -0.8 pp | 5.7% | 6.5% | -0.8 pp |
Coverage Ratio | 232.5% | 204.8% | 27.7 pp | 232.5% | 204.8% | 27.7 pp |
Operational Data | ||||||
Number of Clients | 287,086 | 310,094 | -7.4% | 287,086 | 310,094 | -7.4% |
Number of Offices | 343 | 346 | -0.9% | 343 | 346 | -0.9% |
Total Loan Portfolio* | 7,490.1 | 8,053.1 | -7.0% | 7,490.1 | 8,053.1 | -7.0% |
Average Balance (Ps.)** | 26,090.1 | 25,969.9 | 0.5% | 26,090.1 | 25,969.9 | 0.5% |
- Figures in millions of Mexican Pesos.
- Excludes Other Loans from the average calculation
INTEREST INCOME
In 1Q24 Interest Income was Ps.1.2 billion, that is Ps. 41 million below 1Q23, or a 3% YoY reduction, primarily driven by the decline in our portfolio versus the prior year.
During 1Q24 Net interest income was Ps. 1.03 billion, that is Ps. 26 million below 1Q23, or 3% YoY reduction, primarily driven by the decline in our portfolio.
FINANCIERA INDEPENDENCIA | 1Q24
Interest Income | Financial Margin | ||
(Figures in Ps. million) | (Figures in Ps. million) | ||
-3% YoY | 1,054 | -3% YoY | |
1,217 | 1,176 | 1,028 | |
1Q23 | 1Q24 | 1Q23 | 1Q24 | ||||||
Table 2: Financial Margin | |||||||||
1Q24 | 4Q23 | 1Q23 | QoQ % | YoY % | 3M24 | 3M23 | % | ||
Interest Income | 1,176.1 | 1,213.0 | 1,216.7 | -3.0% | -3.3% | 1,176.1 | 1,216.7 | -3.3% | |
Interest on Loans | 1,167.4 | 1,192.0 | 1,197.2 | -2.1% | -2.5% | 1,167.4 | 1,197.2 | -2.5% | |
Interest from Investment in Securities | 8.8 | 21.0 | 19.4 | -58.2% | -54.9% | 8.8 | 19.4 | -54.9% | |
Interest Expense | 148.4 | 167.1 | 163.0 | -11.2% | -9.0% | 148.4 | 163.0 | -9.0% | |
Net Interest Income | 1,027.8 | 1,045.8 | 1,053.7 | -1.7% | -2.5% | 1,027.8 | 1,053.7 | -2.5% | |
Provision for Loan Losses | 288.4 | 383.8 | 333.4 | -24.8% | -13.5% | 288.4 | 333.4 | -13.5% | |
Net Interest Income After Provision for Loan Losses | 739.3 | 662.1 | 720.2 | 11.7% | 2.6% | 739.3 | 720.2 | 2.6% | |
* Figures in millions of Mexican Pesos |
INTEREST EXPENSE
Interest Expense in 1Q24 was Ps. 148 million, a 4% YoY reduction.
PROVISION FOR LOAN LOSSES
PLL was Ps. 288 million in 1Q24, a 14% decrease when compared to the Ps. 303 million of 1Q23. Annualized PLL to average loans decreased from 16 to 15% year on year.
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
Net Interest Income after Provisions posted a 3% YoY increase, reaching Ps. 739 million during the quarter.
NET OPERATING REVENUE
Net Operating Revenue was Ps. 894 million in 1Q24, a 1% increase when compared to Ps. 885 million in 1Q23. Independencia's net operating revenues decreased 6% YoY, while AEF and AFI's observed a 3% and 22% YoY increase, respectively.
During 1Q24, Commissions and Fees Collected were Ps. 140 million, 1% increase compared to Ps. 138 million registered in 1Q23. Commissions and Fees Paid were Ps. 18 million in 1Q24, 15% decrease when compared to the Ps. 21 million paid in 1Q23. Other Operating Income reached Ps. 32 million in 1Q24 in comparison of Ps. 18 million in the prior year.
FINANCIERA INDEPENDENCIA | 1Q24
NON-INTEREST EXPENSES
Non-InterestExpenses in 1Q24 were Ps. 644 million, 0.4% lower YoY, with costs as a percentage of our average portfolio at 34% managed tightly in the context of a decreasing portfolio balance. This is the result of the disciplined strategy executed by the Company to improve operating efficiency indicators and maintain spending discipline across expenditure categories while continuing to drive positive top line performance.
TOTAL INCOME BEFORE TAXES
Total Income Before Taxes posted a 5% YoY expansion during the quarter, standing at Ps. 250 million.
NET INCOME (LOSS)
In 1Q24, the Company posted a Net Profit of Ps. 179 million, an 8% increase compared to 1Q23. This resulted in earnings per share (EPS) for the quarter of Ps. 0.5292 compared with Ps. 0.4920 for the same period of last year.
Table 3: Net Operating Income
1Q24 | 4Q23 | 1Q23 | QoQ % | YoY % | 3M24 | 3M23 | % Change | |
Financial Margin | 1,027.8 | 1,045.8 | 1,053.7 | -1.7% | -2.5% | 1,027.8 | 1,053.7 | -2.5% |
Provision for Loan Losses | 288.4 | 383.8 | 333.4 | -24.8% | -13.5% | 288.4 | 333.4 | -13.5% |
Financial Margin After Provision for Loan Losses | 739.3 | 662.1 | 720.2 | 11.7% | 2.6% | 739.3 | 720.2 | 2.6% |
Non-Interest Income, net | 122.3 | 121.4 | 117.3 | 0.7% | 4.2% | 122.3 | 117.3 | 4.2% |
- Commissions and Fees Collected | 139.8 | 141.5 | 137.9 | -1.3% | 1.4% | 139.8 | 137.9 | 1.4% |
- Commissions and Fees Paid | 17.5 | 20.1 | 20.6 | -13.1% | -15.0% | 17.5 | 20.6 | -15.0% |
Market Related Income | 0.0 | -1.8 | 30.0 | -98.9% | -100.1% | 0.0 | 30.0 | -100.1% |
Other Operating Income (expense) | 32.0 | 98.5 | 17.9 | -67.5% | 79.4% | 32.0 | 17.9 | 79.4% |
Net Operating Revenue | 893.6 | 880.1 | 885.4 | 1.5% | 0.9% | 893.6 | 885.4 | 0.9% |
Non-Interest Expense | 644.0 | 576.6 | 646.5 | 11.7% | -0.4% | 644.0 | 646.5 | -0.4% |
- Other Administrative & Operational Expenses | 246.0 | 188.5 | 264.4 | 30.5% | -7.0% | 246.0 | 264.4 | -7.0% |
- Salaries & Employee Benefits | 398.0 | 388.1 | 382.1 | 2.6% | 4.2% | 398.0 | 382.1 | 4.2% |
Net Operating Income (Loss) | 249.6 | 303.5 | 238.9 | -17.7% | 4.5% | 249.6 | 238.9 | 4.5% |
* Figures in millions of Mexican Pesos. |
FINANCIAL POSITION
CURRENT ASSETS
Cash and Cash Equivalents closed at Ps. 782 million, 29% below 1Q23. This represents roughly 7% of Total Assets. On a sequential basis, Cash and Cash Equivalents increased Ps. 47 million.
TOTAL LOAN PORTFOLIO
In 1Q24 the Company's Total Loan Portfolio was Ps. 7.5 billion, a 2% QoQ and a 7% YoY reductions, or 3% on a constant FX basis. This performance comes on the back of a more conservative stance on origination, favoring cash flow generation with a focus on asset quality and profitability.
FINANCIERA INDEPENDENCIA | 1Q24
Portfolio Composition
(Figures in Ps. million)
2,802 | 2,774 | 2,791 | 2,765 | 2,729 |
2,034 | 2,053 | 2,101 | 2,118 | 2,127 |
3,218 | 2,941 | 2,881 | 2,764 | 2,634 |
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | ||||||||||
Table 4: Loan Portfolio | AFI | AEF | Independencia | |||||||||||
1Q24 | % of Total | 4Q23 | % of Total | 1Q23 | % of Total | QoQ % | YoY % | |||||||
Change | Change | |||||||||||||
By Business Line | ||||||||||||||
Apoyo Financiero Inc | 2,633.8 | 35.2% | 2,763.8 | 36.1% | 3,218.0 | 40.0% | -4.7% | -18.2% | ||||||
Independencia | 2,728.9 | 36.4% | 2,764.8 | 36.2% | 2,801.5 | 34.8% | -1.3% | -2.6% | ||||||
Apoyo Economico Familiar | 2,127.5 | 28.4% | 2,118.0 | 27.7% | 2,033.7 | 25.3% | 0.4% | 4.6% | ||||||
By Segment | ||||||||||||||
Formal Sector | 5,720.7 | 76.4% | 5,856.0 | 76.6% | 5,210.7 | 64.7% | -2.3% | 9.8% | ||||||
Informal Sector | 1,769.4 | 23.6% | 1,790.5 | 23.4% | 808.1 | 10.0% | -1.2% | 119.0% | ||||||
Total Loan Portfolio | 7,490.1 | 100.0% | 7,646.6 | 100.0% | 8,053.1 | 100.0% | -2.0% | -7.0% | ||||||
* Figures in millions of Mexican Pesos. |
Apoyo Financiero's Loan Portfolio (AFI) closed 1Q24 with a balance of Ps. 2.6 billion (159 million USD), with a 5% quarterly retreat in Mexican pesos and an 18% reduction versus 1Q23. On a constant Fx basis AFI's loan portfolio decreased 2% QoQ and an 9% in the twelve-month period. AFI's portfolio represents 35% of the Company's loan portfolio.
Independencia's Loan Portfolio (FISA) closed 1Q24 with a balance of Ps. 2.7 billion, with a 1% QoQ decrease and a 3% YoY retreat. FISA's portfolio represents 36% of the Company's loan portfolio.
Apoyo Económico Familiar Loan Portfolio a 0.4% QoQ marginal expansion, and a the Company's loan portfolio.
(AEF) closed 1Q24 with a balance of Ps. 2.1 billion, posting 5% YoY increase. AEF's portfolio represents 28% of
Client Distribution by Business Line | Client Distribution by Region | |
AFI | US | |
11% | 11% | |
AEF | FISA | |
32% | 57% | Mexico |
89% |
FINANCIERA INDEPENDENCIA | 1Q24
In 1Q24 the Number of Clients served was 287,086, a decrease of 4,694 compared to the 291,780 clients served in 4Q23.
The client base distribution was as follows:
- Independencia: 162,526 clients
- AEF: 93,614 clients
- AFI: 30,946 clients
Table 5: Loan Portfolio, Number of Clients & Average Balance
1Q24 | 4Q23 | 1Q23 | QoQ % | YoY % | |
Loan Portfolio (million Ps.) | 7,490.1 | 7,646.6 | 8,053.1 | -2.0% | -7.0% |
Number of Clients | 287,086 | 291,780 | 310,094 | -1.6% | -7.4% |
Average Balance (Ps.) | 26,090.1 | 26,206.7 | 25,969.9 | -0.4% | 0.5% |
Table 6: Number of Clients by Product Type
QoQ % | YoY % | |||||||
1Q24 | % of Total | 4Q23 | % of Total | 1Q23 | % of Total | Change | Change | |
Independencia | 162,526 | 56.6% | 164,329 | 56.3% | 176,922 | 57.1% | -1.1% | -8.1% |
Apoyo Económico Familiar | 93,614 | 32.6% | 95,486 | 32.7% | 97,979 | 31.6% | -2.0% | -4.5% |
Apoyo Financiero Inc | 30,946 | 10.8% | 31,965 | 11.0% | 35,193 | 11.3% | -3.2% | -12.1% |
Total number of loans | 287,086 | 100.0% | 291,780 | 100.0% | 310,094 | 100.0% | -1.6% | -7.4% |
Table 7: Portfolio by Credit Type*
QoQ % | YoY % | |||||||
1Q24 | % of Total | 4Q23 | % of Total | 1Q23 | % of Total | Change | Change | |
Independencia | 2,728.9 | 36.4% | 2,764.8 | 36.2% | 2,801.5 | 34.8% | -1.3% | -2.6% |
Apoyo Económico Familiar | 2,127.5 | 28.4% | 2,118.0 | 27.7% | 2,033.7 | 25.3% | 0.4% | 4.6% |
Apoyo Financiero Inc | 2,633.8 | 35.2% | 2,763.8 | 36.1% | 3,218.0 | 40.0% | -4.7% | -18.2% |
Total Loan Portfolio | 7,490.1 | 100.0% | 7,646.6 | 100.0% | 8,053.1 | 100.0% | -2.0% | -7.0% |
* Figures in millions of Mexican Pesos. |
LOAN PORTFOLIO BY STAGES & NON-PERFOMING LOANS PORTFOLIO (NPLs)
Our Stage 1 Loan Portfolio amounted to 86.9% of the total, whereas Stages 2 and 3 represented 7.4% and 5.7%, respectively.
The Stage 3 to total loan portfolio Ratio in 1Q24 was 5.7%, 60bps below from last quarter, and 80 basis- points below the 6.5% from twelve months ago.
The Stage 3 ratio in Independencia was 5.6%, showing a 70-bps decrease compared to 6.3% in 4Q23. The Stage 3 ratio in AEF was 6.2%, 100 bp lower than the 7.2% NPL ratio observed last quarter. The Stage 3 ratio in AFI was 5.4% in 1Q24, 10 bp below the 5.5% reported in 4Q23.
Write-Offs during 1Q24 amounted to Ps. 368 million, 7% lower than 4Q23 and 15% below 1Q23's figure, with a portfolio 7% lower year on year. Compared to the average portfolio, trailing twelve months' write-offs increased from 18 to 20% YoY.
FINANCIERA INDEPENDENCIA | 1Q24
TTM Write-Offs / Avg. Portfolio & Stage 3 Ratio
0 | 20% | |
0 | 18% | |
0 | ||
0 | 6.5% | 5.7% |
0 |
'- | |||||
1Q23 | 1Q24 | ||||
Write-Offs / Avg. Portfolio | Stage 3 | ||||
Recoveries during the quarter reached Ps. 27 million, 6% higher when compared to 4Q23, and 25% higher YoY.
The Coverage Ratio, measured as Allowances for Loan Losses over Performing Loans Stage 3, reached 233%, standing 16 percentage points above the 217% observed in the last quarter, and a 28 percentage points increase from 205% of the twelve months ago.
ORIGINATIONS
Originations by Business Line
(Figures in Ps. million)
425 | 448 | 481 | 429 | 447 | |||||
258 | 293 | 322 | 290 | 287 | |||||
365 | 360 | 331 | 384 | 332 | |||||
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | |||||
AFI | AEF | Independencia | |||||||
Originations for the quarter reached Ps.1.1 billion, increasing 2% YoY. On a sequential basis, originations reduced 3%.
COLLECTIONS
Below you can see the Cash Collected for our main portfolios. This considers cash collected from clients including interest, amortization, and commissions.
The Cash Collected from the Portfolio decreased 6% YoY. On a quarterly basis, it posted a 0.4% reduction. On a constant FX basis, AFI's collections declined 6% YoY, while consolidated collections decreased 3% YoY. Overall, collections roughly doubled originations during the quarter, boosting cash generation.
FINANCIERA INDEPENDENCIA | 1Q24
Collected Cash
(Figures in Ps. million)
1006 | 995 | 983 | 973 | 979 | ||||||||
628 | 612 | 644 | 611 | 618 | ||||||||
638 | 617 | 594 | 583 | 561 | ||||||||
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | ||||||||
AFI | AEF | Independencia | ||||||||||
Table 8: Origination and Collected Cash* | ||||||||||||
1Q24 | 4Q23 | 1Q23 | QoQ % | YoY % | ||||||||
Independecia | 447.3 | 428.6 | 424.7 | 4.4% | 5.3% | |||||||
Apoyo Económico Familiar | 287.1 | 290.2 | 257.5 | -1.1% | 11.5% | |||||||
Apoyo Financiero Inc | 331.8 | 384.4 | 365.0 | -13.7% | -9.1% | |||||||
Total Originations | 1,066.2 | 1,103.1 | 1,047.3 | -3.3% | 1.8% | |||||||
Independecia | 978.6 | 972.8 | 1,005.9 | 0.6% | -2.7% | |||||||
Apoyo Económico Familiar | 617.8 | 610.5 | 628.0 | 1.2% | -1.6% | |||||||
Apoyo Financiero Inc | 560.5 | 583.2 | 650.9 | -3.9% | -13.9% | |||||||
Total Collections | 2,156.9 | 2,166.6 | 2,284.8 | -0.4% | -5.6% | |||||||
* Figures in millions of Mexican Pesos. |
LIABILITIES
In 1Q24, Interest Bearing Liabilities were Ps. 3.8 billion, a 23% decrease vs. Ps. 4.9 billion in 1Q23. On a constant FX basis the decline was Ps. 1.0 billion, or 21% YoY driven by a reduction in our unsecured debt. Compared to the prior quarter, net debt decreased Ps. 111 million or 3% on a constant FX basis as we work to structure the balance sheet to meet short term maturities.
In 1Q24, FINDEP's Debt consisted of Ps. 1.2 billion of US dollar-denominatedLong-Term Debt due in March 2028 as well as Ps. 2.5 billion in Bank and other entities loans.
Our Net Debt, measured as interest bearing liabilities minus cash and cash equivalents, reached Ps. 3.0 billion at the end of the quarter, a Ps. 821 million or 22% YoY reduction. When adjusting for FX impacts, the Net Debt declined 19% YoY.
STOCKHOLDERS' EQUITY
In 1Q24 Stockholder's Equity was Ps. 5.4 billion, a 12% increase from Ps. 4.8 billion at the end of 1Q23. Stockholders' equity reflects Ps. 610 million in Net Income and Retained Earnings for the Year, - Ps. 71 million YoY variation in foreign exchange effect and a -Ps. 20 million YoY variation in derivatives for hedging purposes due to the Company didn't´ have any hedges in 1Q24.
FINANCIERA INDEPENDENCIA | 1Q24
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Financiera Independencia SAB de CV SOFOM ENR published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 05:03:04 UTC.