Fees and commission income also came in handy at a massive US$18,1 million, up from US$3 million in the prior comparative period.
Interest income contributed 57% of the society’s revenues, signalling a return to core business, which saw loans and advances increase by a dramatic 813% from US$21,3 million at 30 June 2010 to US$194,5 million as at 31 December 2011.
Non-interest income growth was buoyed by increased transaction volumes across the institution’ extensive branch network, whilst the phenomenal 139% rise in totals assets was driven by a growth in deposits of more than 163%.
Cabs also scored a major success in cost containment.
Whilst operating expenses were up 102% in nominal terms from US$12,7 million to US$25,7 million, its cost to income ratio declined sharply to 63% from 130% in the prior reporting period, reflecting improved efficiencies in cost management. Costs from loan losses and impairments were a meagre US$598 480, down from US$1,078 million in the previous year, a reflection of strong risk management within the institution.
Cabs’ prudent and conservative approach to banking has seen the institution not only attracting but retaining a large market share of deposits.
Deposits grew from US$88,7 million in June 2010 to US$233,5 million in December 2011 and the building society attracted long-term funding from international lenders.
Cabs secured a US$20 million line of credit from the PTA Bank to finance its core mortgage lending business, helped by its A+ credit rating issued by an international rating agency.
A maturity analysis of the deposits held by Cabs shows that they are still largely short term in nature. More than US$209 million represents demand deposits which can be withdrawn at any time within three months, whilst US$27 million matures btween three months and one year.
Of the total deposits, US$2 million falls due after more than a year.
These constraints have influenced the society’s loan profile and limited its ability to create long term mortgages.
A look at Cabs’ loan portfolio shows that US$74 million of the loans are for over five years. US$30 million falls due within the one to five-year time bucket, whilst the rest of the society’s loans mature in less than a year. This asset profile reflects the company’s prudent approach to liquidity management.
‘’The Society’s approach to managing liquidity risk is to ensure, as far as possible, that it will be always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or risking damage to the Society’s reputation,’’ Cabs said in statement attached to its financial results.
The cash generation of the business remained strong, with the net cash-flow position improving from US$11 million in 2010 to US$17 million in 2011 on the back of a strong brand.