Trustco, the diversified financial services Group, has announced a 6.9% drop in third quarter profits attributed to the launch of Yambu, a micro insurance product in South Africa.
For the quarter ending 31 December, the group recorded a net profit of N$52.6 million down from the normalised profit of N$56.5 million in the comparative period.
Headline earnings per share for the period is 7.31 cents and basic earnings per share is 7.34 cents.
Despite the drop in profits, the educational loan book grew by 16% resulting in year on year profits of the division growing by 22.5%. In a statement, Trustco says this strong growth was achieved through strategic partnerships with international lending institutions which culminated in borrowing arrangements which were primarily focused to grow the loan book.
The Namibian micro-insurance segment's after tax profits also grew by 12.6% from the comparative period, and significantly increased the group's customer offering.
The group also said the trial roll-out of the micro-insurance life cover offered through Shoprite retail outlets in Namibia has yielded positive results. "Management is now content that the experiment can be tried in other regions of the continent, albeit selectively," the statement from Trustco said.
The company added that the launch of a new micro-insurance offering in South Africa in November under the "Yambu" brand has given effect to the long awaited contemplation to roll-out the Namibian business model to other countries.
"The Yambu product continues to impress and the sales momentum in the product has steadily met the expectations of management. This initial phase coupled with the scaled down historic back office business has resulted in the South African micro-insurance segment contributing only 0.99 cents per share to the headline earnings (2012: 0.27)."
The properties segment grew by 24.5% when compared to the comparative period in the 2012 financial year. Only a limited number of properties in the first phase of the Land Bank project remain unsold. Phase two of the project will be launched in the 2014 financial year.
Trustco advised shareholders that historically the final quarter of the financial year has on average delivered higher earnings when compared to the preceding financial quarters.