The miss was largely due to higher staff costs, which grew 8% y-o-y, for performance-related bonuses; and other operating expenses, which grew 9% y-o-y due to a combination of business-related costs, such as an increase in report costs, lease expenses, maintenance and commission expenses, IT support fees and forex losses.
The miss was further exacerbated by its weaker share of results from its joint ventures, which fell 22% y-o-y.
CBA’s contribution from Cambodia in 2HFY2024 was weaker, 17% lower y-o-y; due to higher employee expenses for increased headcount and depreciation.
Losses from Myanmar stayed stable at $0.1 million in 2HFY2024.
See also: Our 2025 picks: Credit Bureau Asia — Steady growth banking on niche offering
CBA declared a 2-cent final dividend per share (DPS) in 2HFY2024, bringing its full-year FY2024 DPS to 4 cents, up from 3.7 cents this time last year.
Sustained growth
Choong notes sustained growth across CBA’s financial institution (FI) and non-FI data segments.
Revenue growth in 2HFY2024 was broad-based across both the FI and non-FI data businesses. In the FI data business, apart from its key growth driver of enquiries for new credit applications, there was a noticeable rise in demand for consumer direct and employment check reports.
CBA is one of two credit bureaus licensed to provide FI data business services in Singapore. Apart from the incumbent banks, the two newer digital full bank entrants in Singapore continued to engage CBA’s services, though its volumes have been slightly softer than expected, according to management.
On CBA’s non-FI data business, the pick-up in revenue came largely from global customers seeking credit risk management solutions; this partly offset the lower revenue from local customers, says Choong.
While the US Federal Reserve rate cuts in FY2024 make a case for higher volumes of bulk risk reviews, CBA noted in its earnings discussion that demand for new applications have sustained so far in FY2025.
Lifting demand
Choong acknowledges that CBA’s FY2024 revenue from its joint venture Credit Bureau Cambodia was stable y-o-y on a constant currency basis, but higher staff costs could drag its FY2025 net profit.
Although credit report sales for its other joint venture Myanmar Credit Bureau picked up slightly in FY2024, this was offset by the absence of new membership fees contributed by banks, which were collected in the preceding year. This resulted in its flattish contributions to CBA.
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CBA remains on the look-out for potential acquisitions in the region, notes Choong.
Choong expects the pick-up in regional trade activity to lift demand for credit enquiry services.
The progressive growth of business activity among digital banks in Singapore is a key re-rating catalyst for CBA, in Choong’s view.
On the other hand, the prolonged uncertain political situation in Myanmar, affecting joint venture Myanmar Credit Bureau; along with the introduction of additional credit bureau licences in Singapore, are key downside risks, says Choong.
Credit Bureau Asia is one of The Edge Singapore’s 12 stock picks from the Singapore Exchange for 2025.
As at 4.11pm, shares in Credit Bureau Asia are trading 5 cents higher, or 4.24% up, at $1.23. Its shares have climbed over 36% over the past year.
