Earnings call transcript: ASA International’s H2 2025 performance shines

ASA International delivered strong financial results for the second half of 2025, showcasing significant profitability growth and strategic product expansions. The company’s stock surged by 7.01% following the earnings announcement, reflecting investor confidence in its robust operational performance and strategic initiatives. The stock has delivered an impressive 168.5% return over the past year, though investors should note the stock’s high volatility with a beta of 2.0.

Key Takeaways

• ASA International’s net profit nearly doubled in 2025, reaching $56.5 million.
• The company’s return on equity improved significantly to 44%.
• ASA launched a microinsurance product, achieving 740,000 life policies in force.
• The company’s digital financial services are now operational in Ghana and Tanzania.
• Stock price increased by 7.01% post-announcement.

Company Performance

ASA International showed exceptional performance in 2025, with net profit doubling to $56.5 million, a 98% increase compared to the previous year. This growth was driven by an increase in total comprehensive income and a substantial rise in return on equity from 33% to 44%. The company’s strategic focus on high-yielding subsidiaries and operational leverage has paid off, with income growth of approximately 40%. For deeper insights into ASA’s financial health and growth prospects, InvestingPro offers comprehensive analysis including Fair Value estimates and expert ProTips available for subscribers.

Financial Highlights

• Reported net profit: $56.5 million (98% growth YoY)
• Total comprehensive income: $73.6 million (up from $21 million in 2024)
• Return on equity: 44% (up from 33%)
• Gross yield: 48.2%
• Net interest margin: ~40% (up ~400 basis points)

Outlook & Guidance

ASA International is projecting continued growth, with an EPS forecast of $0.51 for FY2025 and $0.63 for FY2026. The company is expanding its product offerings, including a new microinsurance product and a Micro SME proposition, and is planning to roll out an Islamic banking module in Pakistan by the end of 2026. These initiatives are expected to drive further growth and diversification of revenue streams. According to InvestingPro analysis, the stock currently appears overvalued relative to its Fair Value estimate, placing it among companies on the Most Overvalued list. Investors can access detailed valuation metrics and 6 additional ProTips on the platform.

Executive Commentary

ASA International’s executives highlighted the company’s strategic focus on expanding its financial services and improving operational efficiency. "Our commitment to innovation and client-centric services has been instrumental in achieving these results," said a company spokesperson. The leadership also emphasized the importance of digital transformation in enhancing client experiences and operational productivity.

Risks and Challenges

• The effective tax rate remains relatively high, though it improved to 45.6% in 2025.
• The company faces potential challenges in maintaining asset quality amid rapid portfolio growth.
• Currency fluctuations, such as the appreciating Ghanaian cedi, can impact financial results.
• Expansion into new markets may present regulatory and operational challenges.

Q&A

During the earnings call, analysts inquired about the company’s strategy to manage tax rates and the impact of digital transformation on loan officer productivity. ASA International’s management expressed confidence in further reducing the tax rate through strategic initiatives and highlighted ongoing efforts to enhance digital capabilities, which are expected to significantly improve productivity and client service.

ASA International’s strong financial performance and strategic initiatives position it well for future growth, as evidenced by the positive market reaction to its latest earnings report. For investors seeking comprehensive analysis, ASA is one of over 1,400 US equities covered by InvestingPro’s Pro Research Reports, which transform complex financial data into clear, actionable intelligence through intuitive visuals and expert analysis.

Full transcript - ASA International Group PLC (ASAI) H2 2025:

Operator: Good day, ladies and gentlemen, and welcome to ASA International 2025 Results. At this time, all participants are in a listen-only mode. Later, we will conduct a Question and Answer session through the phone lines, and instructions will follow at that time. I would like to remind all the participants that this call is being recorded. I will now hand over to Jonathan Berger, Head of IR, to open the presentation. Please go ahead.

Jonathan Berger, Head of Investor Relations, ASA International: Thank you. Good afternoon, and thank you all for joining ASA International’s 2025 Full-Year Results webcast. As you will no doubt have already seen, we released our 2025 results first thing this morning. I’m joined here on the call by ASA International CEO Rob Keijsers and CFO Geert Embrechts. Rob and Geert will run through this results presentation, and afterwards, we’ll be happy to take any questions you may have. Before we begin, let me draw your attention to the disclaimer at the end of the presentation. Please be advised if you continue to listen to this presentation, you’re bound by this disclaimer. With the formalities out of the way, I would like to now hand over to Rob for his opening remarks.

Rob Keijsers, Chief Executive Officer, ASA International: Yes. Thank you, Jonathan. Also from my side, a warm welcome to today’s result webcast. Let’s move to our performance in 2025. It is clear that ASA International had an outstanding year in 2025, with our profits doubling and impact scaling across our operating markets. I’m very pleased to note that we’re now seeing sustained growth, enhanced profitability, and a strengthened balance sheet. We’ve seen continued commercial success with our client base growing by 10% in 2025, with our client base standing at 2.8 million. Alongside this client growth, the outstanding loan portfolio, or OLP, increased to $611 million and represents a 33% growth versus last year. The growth of the loan portfolio has not been at the expense of portfolio quality, with PAR 30 having improved to 1.8% at the end of 2025.

To provide some context, this is an industry-leading level and testament to the strength of the ASA Model. From a productivity perspective, on average, individual loan officers are serving more clients than last year, with clients per loan officer increasing to 308 in 2025 from 290 in 2024. This strong operational performance has translated into significantly improved financial performance, with reported net profit growing by 98% to $56.5 million in 2025. This net profit includes the impact of hyperinflation accounting and impairments relating to India. Excluding this item, underlying net profit amounted to $57.2 million, which still represents a 94% increase compared to 2024. This profitability has boosted our return on equity to 44% in 2025 from 33% in 2024.

What’s also very encouraging is that the Total Comprehensive Income increased significantly to $73.6 million in 2025 compared to $21 million in 2024, as there was a positive FX impact on the FX Translation Reserve this time round. Next, of course, the doubling of Net Profit. It is this financial performance, which means we can continue returning capital to our shareholders in line with our Dividend Policy. Today, this morning, we announced a recommended final dividend of nine and a half cents per share on Underlying Net Profit, implying a total dividend for the full year 2025 of 14.3 cents, which is double the amount paid for 2024. Of course, Geert will dive into the financials in much more detail later this presentation.

It’s also important to note that alongside the improved financial performance, significant work has already been undertaken to refresh and renew leadership across the organization so we can accelerate the transformation. Risk and Compliance was naturally part of this effort, and this has led to an enhanced resilience and regulatory compliance. Lastly, we’ve driven additional product innovation with the launch of our microinsurance product, where we now have 740,000 life policies. Providing insurance to those at the bottom of the pyramid demonstrates that financial inclusion has grown beyond simply loans. We’ve also worked hard to develop a micro SME proposition where we seek to meet the evolving and growing working capital needs of our clients and bridge the gap between microfinance and traditional banking. I’d like to take the opportunity to talk about operational leverage that really starts to kick in.

As you can see on this slide, we can see the scaling impact of the various KPIs, starting with client growth and moving through to net profit. Clients have grown 19% since 2023. When this is combined with meeting the evolving and growing working capital needs of our clients with larger ticket sizes, as evidenced by OLP per client growing by 36%, we can see that gross OLP has grown by 62%. The strong growth in the loan portfolio creates a compounding revenue base, which in turn drives scale and efficiency, ultimately, the strong growth in net profit. We simply put more load on the system. Using the traditional operating jaws metric, we can see that revenue growth has outpaced cost growth by 37 percentage points as operational leverage has truly kicked in.

I now wanted to move to our digital transformation journey, which is, of course, a major program in the way to deliver enhanced resilience, improved productivity, and a platform for future growth. It is important to note that our approach is very much human-led technology, where we will maintain our high-touch client model, but with digital enhancements. Basically, we take out the manual pain points to improve the client journey in order to spend more meaningful time with our clients. Our new market-leading Temenos-based T24 core banking system replaces the existing in-house system that is nearing its end of life. From a resilience and compliance perspective, this provides the robust foundation we need to scale our growth in the future. Equally important is the fact that it meets the evolving regulatory requirements in our operating countries.

This is especially relevant in those markets where we are seeking to gain deposit-taking licenses. Linking to the previous slide on operational leverage, the digital transformation program will provide the tooling to increase loan officer productivity. The loan officer app will simplify onboarding and applications and will eliminate manual processes and excess paperwork. Combined with this, we’re exploring reducing the frequency of meetings from weekly to biweekly. This is already the case, by the way, in Pakistan and Myanmar, which have excellent PAR 30 levels, showing that it’s doable. To give some context, at present on average, each loan officer serves roughly 300 clients. If this average were to move to 600, then it’s easy to see how the business can efficiently scale whilst retaining the valuable face-to-face time between a loan officer and the client.

The third aspect of our digital transformation effort is to create an even more compelling and truly digital client offering, where applying for loans and managing your accounts becomes much easier with an app. Our clients are becoming more digital savvy, so meeting their expectations is essential and future-proofs our business moving forward. What does that all mean from an execution roadmap perspective? In terms of country rollouts, we focus on the highest impact by migrating the largest country first and then subsequently leveraging these infra investments to other countries. With this in mind, as of today, we’ve already migrated Pakistan, Ghana, and Tanzania with digital apps live in Ghana and Tanzania. Crucially, we’ve now implemented CBS and DFS in both an MFI, lending only, and an MFB, a banking environment scenario, which will allow for more efficient rollouts going forward.

With the addition of Kenya, which is planned for this year, and Nigeria, which is planned for the first half of next year, we’ll have covered nearly 70% of our client base. Let me take you through our portfolios in the different regions. Here you can see that our well-diversified portfolio is driving OLP growth with the portfolio effects helping to drive the improved operational performance we are reporting today. In particular, we can see that our African regions are now the two largest from an OLP perspective. East Africa continues the largest segment with growth from each country seen in the first half. Accelerating growth from Uganda, Rwanda, and Zambia is also highly encouraging alongside our traditionally larger markets in, for instance, Tanzania and Kenya.

In West Africa, Ghana’s strong contribution following a combination of strong operational growth and the impact of the appreciating cedi has been the main contributor to West Africa’s material increase in OLP this year. It’s also pleasing to see the growth in Nigeria and Sierra Leone this year, given the historic performance issues seen in these two countries. Let’s move to our Asian segments. In South Asia, we did see a growth in OLP in 2025. This is despite the intentional shrinkage of our operations in India as we work to deconsolidate our business there. You can see that ASA International is still growing strongly by 31% in 2025 in Pakistan and Sri Lanka, with both of these countries now benefiting from refreshed local leadership in place. Lastly, the Philippines and Myanmar have grown on a constant currency basis.

The decline on an actual basis in dollars reflects the fact that we now have to use the market rate for the kyat, the Myanmar kyat, versus the central bank rate, as was used in 2024, rather than any underlying operational issues. Accordingly, Myanmar’s gross OLP reduced by 23% on actual basis but increased by 32% on a constant currency basis. It’s also worth noting that in Myanmar, our colleagues and clients demonstrated tremendous resilience in light of the devastating earthquake that struck earlier in 2025. Combined with the portfolio, of course, the portfolio quality, I want to touch on that. It is industry-leading. This reinforces the fact that we’re not sacrificing asset quality in the pursuit of growth. One of the benefits of the ASA Model is that it consistently delivers high portfolio quality, as evidenced the low group PAR 30 of 1.8%.

This is a 40 basis point improvement compared to the end of 2024. Outstanding portfolio quality was consistently recorded in Pakistan and Kenya, and Uganda, with PAR 30s of less than half a %, reflecting best-in-class field discipline. Also Myanmar and Ghana are in the next group of countries which sit in the 1%-2% bracket, which is still industry-leading asset quality. Nigeria is strongly improving and sits slightly above this level. The last category of countries is those with higher PAR 30 levels, and this typically reflects the fact that these countries are in the midst of transforming their operations under new leadership. I’ll now happily hand over to Geert to review our financial performance in greater detail. Geert is our new Group CFO per February this year, and Geert, a warm welcome to you to your first webcast.

Geert Embrechts, Group Chief Financial Officer, ASA International: Thanks, Rob. I would also like to add my own warm welcome for those who listen to today’s webcast. As you may know, I’ve recently joined ASA International and I’m now presenting my first results, and I’m very proud and honored to present these great results. Let me zoom in on the value drivers, and particularly the first one, income, and the income trends of last year. On this slide, we have set out the income trends for the business year-on-year alongside the yield and funding rate developments. Income rose by almost 40%, driven by asset growth, Rob already mentioned this earlier, and margin improvement. In essence, it was a positive volume mix effect seen throughout 2025, both asset growth and margin improvement.

Gross yield increased to 48.2% as we saw positive mix effect with the subsidiaries, with the higher yields increasing more and giving a higher OLP growth. Basically, we grew more in the countries that also had the highest margins. Funding rates have remained stable since 2024. This meant that the NIM increased by nearly four percentage points to almost 40%. On the face of it, other operating income decreased in 2025 compared to 2024, but 2024 was positively affected by an incidental gain of $3 million from the loan assignment agreement with ASA Myanmar lenders. Excluding this one-off item, other operating income remained broadly flat period on period. Let me then take you to another value driver, costs.

As you can see, our costs rose by 26% year-on-year, and this increase is mainly due to a combination of business expansion, investments in technology, as Rob already explained, as well as impact of the appreciation of the Ghanaian cedi, which amounted to more than $5 million. Most encouragingly, with higher income growth than cost growth, the cost-to-income ratio has significantly improved to 56.8% in 2025 from 61.4% in 2024. As can be seen from the bridge on the right side, this improvement is mainly due to the growth in that interest income, which significantly outpaced the increase in costs. Now I would like to turn to the equity base and the developments in equity. What I’m really happy with is that I can report a strong improvement and strengthening of that equity base.

As can be seen on the left-hand side, total comprehensive income has grown significantly by 233%, reflecting both increased profitability of the business as well as a positive FX translation reserve impact. The positive impact of the latter amounted to almost $16 million, compared to a negative impact in 2024 of $4.3 million. As a result, total equity increased by 68% year-on-year in 2025. Now moving on to the bottom line on the next slide, net profit. As Rob already mentioned at the start of the presentation, we’ve seen strong profitability growth delivered by the business, as well as good underlying net profit growth in 2025 compared to 2024. The reported net profit increased by almost 100% to $56.5 million, with the underlying net profit increasing by 94% to $57.2.

As a reminder, underlying net profit excludes, in this case, the impact of hyperinflation as well as some other impairments relating to India. I also wanted to flag that the effective tax rate has improved. If we look at that effective tax rate including withholding tax, it reduced from 55.1% in 2024 to 45.6% in 2025. This is a significant reduction, and it was mainly due to a change in the profit mix with greater contribution from the countries that have a lower effective tax rate. Further structural reduction in our effective tax rate is still dependent on the implementation of transfer pricing in three countries mainly, and the ability to capitalize on the tax losses in India and at the holding company levels. The strong growth in profitability derives from an increasing operational leverage, which Rob discussed earlier as well.

The chart on the right hand highlights the traditional operating jaws since 2023, and here we can see that the revenue growth has significantly outpaced the cost growth, and that adds to a total improvement, I think, of 37%. Moving from the P&L to the balance sheet, let’s touch on the funding side. From a funding standpoint, we saw the company’s funding position significantly increase to $710 million at the end of 2025, compared to $500 million at the end of 2024. We can observe growth in almost every funding category except the microfinance loan funds, which in any event was anyway a small category. As you can see from the chart, local deposits have increased in line with our funding strategy, with the intention to grow further with a focus on fixed deposits. This will actually be a strong focus point going forward.

It is at the same time fair to say that the appreciation of the Ghanaian cedi also contributed to this growth in local deposits, as Ghana is one of the countries where we already have a good deposit base. Overall, the funding profile for the Group remains stable and the pipeline is robust, standing at $261.6 million for 2026. This will ensure that we can fund our growth ambitions very well for the year. Lastly, I would also like to take the opportunity to highlight our favorable maturity profile, with term loans maturities exceeding our typical client loan tenure of six months, an indication of efficient but also prudent asset and liability management. On the right-hand side, you will note we have a minimal FX risk on the liability side for the lending purposes, which is almost all funding is either hedged or denominated in local currency.

Let me now hand over back to Rob for closing remarks.

Rob Keijsers, Chief Executive Officer, ASA International: Yeah. Thanks, Geert. I’d like to take the opportunity to update you on the progress we’ve made in 2025 in driving long-term sustainable growth at ASA International. In the top right-hand corner of this slide, you can see the strategy house we shared at the time of the 2024 full-year results. This demonstrates how we will seek to fulfill our mission. As a reminder, the house has three pillars which cover our plans to drive growth, build resilience, and achieve sustainable impact. In terms of driving growth, we can see progress across the board with strong operational and financial growth. As mentioned before, we delivered significant operational growth with strong margins on the asset side. There have also been productivity enhancements, with an increase in clients per loan officer. Lastly, but of course, the digital financial services is now live in Ghana and Tanzania.

The growth indicators I just highlighted, of course, need to be fully backed up by greater resilience across the organization. In terms of the resilience pillar, 2025 also seen a progress across a number of areas. This includes a strengthened Executive Committee at the Group level, alongside refreshed leadership teams in a number of countries. We see greater system resilience with a migration to T24 as our core banking system in Ghana and Tanzania, on top of the already migrated Pakistan business in 2024. Grace Thiongo, our Chief Risk and Compliance Officer, has been busy reinvigorating the risk and compliance functions. The last pillar of our strategy relates to achieving a sustainable impact. Financial performance is the thing that will drive the achievement of our sustainability goals, and as I mentioned already, we’ve seen robust profitability levels in 2025.

A key initiative has been ASA International joining the Client Protection Pathway, as we seek to ensure our clients are treated fairly and responsibly. We’ve also continued our community social and environmental programs. There’s clearly much still to do, but I firmly believe the disciplined execution of the strategy is really yielding the first results. Looking forwards, I’d like to take the opportunity to detail ASA International’s top strategic priorities for 2026 and beyond. Given the scale of the transformation effort underway, we have decided to distill the existing strategy house developed last year into six tangible levers, six tangible priorities. The first two, client journey and digital transformation, have been covered already in this presentation. The third priority, operational excellence, is how we update and reconfigure the ASA Model to fit our new human-led tech approach.

This is the detail behind improving loan officer productivity and streamlining processes, basically, the ASA 2.0 model. In terms of deposits, the fourth priority, this is an important lever to pull to secure efficient and diversified funding. In addition, it really deepens the client relationship. A key part of this priority is seeking deposit-taking licenses in countries where we only have an MFI status, a lending-only status. The fifth priority relates to a renewed focus on disciplined capital allocation across the Group. In essence, we want to put capital to work where returns, resilience, and impact are the greatest. Geert, as mentioned, our new CFO, will be embedding this discipline. Lastly, we look into new country expansion. This speaks for itself, of course, but done in a highly disciplined and selective manner, can increase the resilience and, of course, our addressable market.

Our strong belief is that each of these actions will have a compounding effect on growth and, by extension, the overall performance of the business going forward. I’d like to wrap up the presentation by drawing out the key highlights from 2025 across three themes. First, people, most importantly. As I have mentioned already, we’ve strengthened senior leadership across the organization, both at the Group and the country level. People are the key to delivering the strategic priorities I outlined on the previous slide. The strategy. Like I mentioned, key steps were taken in terms of products with microinsurance, as well as developing a Micro SME proposition. The digital transformation program also progressed with major migrations in Ghana and recently Tanzania. Of course, the financials.

The financial success of ASA International in 2025 has been made abundantly clear throughout this presentation, whether it is profitability, loan portfolio, or asset growth. We are proud and thankful that we’re able to continue providing capital returns to shareholders. Lastly, I want to cover the outlook for 2026. As with many other companies, of course, we continue to closely monitor the situation in the Middle East and what the potential impacts will be in our operating countries. While this does create uncertainty, we believe the fundamentals of the business remain strong, as evidenced by the growing profitability levels in January and February of this year. We currently expect demand for loans by clients to also be resilient, and our focus is on disciplined execution of the strategy and ongoing productivity and efficiency initiatives.

We’ve now concluded the formal part of this presentation, and I’ll hand back to the Operator to open the floor to questions from the conference lines. Thank you.

Operator: Thank you. We’ll now begin the question and answer session. Participants can submit questions in written format via the webcast page by clicking the Ask a Question button. If you are dialed into the call and would like to ask a question, please signal by pressing star one on your telephone keypad. Once again, if you would like to ask a question on the conference line, please signal by pressing star one on your telephone keypad. Our first question comes from the line of Rahim Karim with Cavendish. Please go ahead.

Rahim Karim, Analyst, Cavendish: Good afternoon. Hopefully, you can hear me. Three questions, if I may. Rob, just to maybe pick up on some of your last comments around the macro situation, could you perhaps share any initial indications you have with respect to client behavior? Are you seeing anything change there, or is it very much business as usual? I appreciate we’re still early days in the conflict, but any comments you have on that would be helpful. The second question was just to talk a little bit about the digital transformation that you outlined, and maybe just some examples, if you can, around the operational leverage that should support. You obviously mentioned some of the customer experiences, but can you help bring that to life in terms of your cost base? How it helps embed scalability would be useful.

The third is, I think you mentioned at some stage the development of new offering in Pakistan around Sharia banking, just to get any color or any additional comment you can on that and whether that’s something that you’re able to roll out to other jurisdictions at the appropriate time. Thank you.

Rob Keijsers, Chief Executive Officer, ASA International: Yeah. Thanks for your questions. Let me start with geopolitical situation and what we see in our markets. First and foremost, what we’ve seen in January and February and also in March from operational perspective, we don’t see any impact yet. What we can see is, of course, that with a 50% higher petrol price, fuel prices in the countries, that puts pressure on the cost of living of people. That is something, if you put it to the extreme, if you have fuel rationing in some of the countries, and for instance our loan officers are driving with their motorbikes to see the clients, and if you have a fuel ration of five liters per week, that might become more difficult. There’s always ways to find ways around it, and until now we don’t see issues there. Until now we don’t see that.

However, of course, if you do the simple math on higher oil prices, which might lead to higher inflation, which might lead to a higher cost of living, which in the end might have an effect on the FX compared to the US dollar, it’s not something that we’ve seen significantly now, but the longer it takes, the more painful it becomes for the entire world, including us of course. We monitor it closely, and we make sure that we are cash rich, that we have a clear eye on our business, that we closely monitor our clients and our business in the different opcos. Until now, we show much resilience. Maybe on the digital transformation, yeah, that’s of course a very interesting one. I mentioned just to take one metric or one KPI, is that 300 clients are served by one loan officer.

Once we roll out our digital transformation, basically take all the paper pain points and all the non-value-add touchpoints with a client, you take out. If you digitize that, simplify that process, a loan officer can have more meaningful time with a client, whilst at the same time having more load on the system. Rather than servicing 300 clients per loan officer, you can grow to, let’s say, 600 clients per loan officer. It’s on the one hand because of the fact that you take out all those pain points in the process. Rather than having a two-week turnaround time to provide a loan, you bring that back to three days. You take out manual loan application forms, and you do that digitally, for instance. Also we now have weekly group meetings for all the right reasons.

If you bring that to biweekly, then of course a loan officer visits half of the time. That combined means going from 300-600 clients per loan officer, and you can just calculate on the back of an envelope what that does on your operational leverage and your scalability of the business. Maybe on the Sharia banking, that’s a very interesting question. Well remembered. I think we can be extremely happy that we already rolled out T24 in Pakistan in 2024 because T24 has a so-called Sharia banking module. It’s relatively easy without an entire implementation to also offer Sharia banking. What happens in Pakistan that we have a double banking window, a conventional window, and an Islamic window next to each other. We can offer that because as Pakistan is foreign owned, so we are able to offer also conventional banking.

You see that the majority of urban area clients would opt for conventional banking. In the more rural areas, you see more Islamic banking. We see that going live towards the tail end of 2026. That is also combined with the deposit-taking capability that’s now being rolled out. Also both in the Islamic window as a conventional banking window, we should be able to, in Q4, offer deposits. It’s well underway. In principle, your question, could we roll it out in other jurisdictions as well? The answer is yes, because once you have T24 everywhere and you have the Islamic or the Sharia banking module live in your ecosystem, we can also deploy it, of course, to other markets.

For now, we don’t see a significant demand outside of Pakistan, but the fact that we have it readily available is, of course, a good thing that if need be or want be, we can roll it out. Does that answer your questions?

Rahim Karim, Analyst, Cavendish: That’s super helpful, and congratulations on the extremely strong set of numbers.

Operator: Our next question comes from the line of Hugo Cruz with KBW. Please go ahead.

Hugo Cruz, Analyst, KBW: Hi. I have two questions as well. First, on the cost-income ratio, it actually only improved slightly half-on-half due to the strong OpEx growth. Obviously, you had a lot of tech investments, business transformation investments, et cetera. I was wondering if you could give us a few numbers on what those investments are to try to strip out what was kind of, let’s say, natural inflation in the cost base versus sort of growing investments for growth. That’s the first question. Second, on the SME offering.

Can you quantify the potential size of this opportunity relative to your traditional addressable market? How many clients basically grow too big and are now dropping out and now can be addressed with a new offering? Third, again, you mentioned capital allocation as a value accelerator. If you could give us a little bit more color on what that could mean, what is changing, especially with the new CFO in place here. Thank you.

Rob Keijsers, Chief Executive Officer, ASA International: Yeah. Thanks, Hugo. On the first and the third question, I’d like to hand over to Geert. On the MSME one, I’ll take it, but please, Geert.

Geert Embrechts, Group Chief Financial Officer, ASA International: Yeah. No, thanks, Hugo. On the cost rises, as indicated, I think around $5 million of the cost rises or a bit more than that was attributable purely to the appreciation of the cedi. I think then in terms of inflation, what we’ve seen, and it goes a bit too far to now provide details, but we’ve seen, of course, that inflation in most countries was relatively subdued. At the same time, with the growth and the number of clients rising, the number of branches rising as well, and the number of FTEs rose, as well as I think our investments in the IT side.

It goes a bit beyond, I think, to reveal, let’s say, also for competitive reasons, the details on the investments in IT, but I would label that approximately about 20%-25% of that cost increase is attributable to the investments on the digital and transformation front. Let me turn to the third question on capital allocation. Yes. Actually, yesterday we had a Board meeting where we improved the capital allocation framework, which really foresees in, I think, clear, transparent, but also tighter and solid allocation measures. First of all, by looking at the ROE, return equity, for countries adjusted where needed also for CAR, for capital adequacy ratios, because then you can really make a like-for-like. Next to that, equally or maybe even more important, the total comprehensive income, because of course, that’s what brings the shareholder return.

We balance that shareholder return in U.S. dollars with our needs to also diversify. We have a few countries where we are very strong, and we have a good size, particularly Ghana and Pakistan. We also want to diversify that to more countries, at least have six to seven countries be in the lead there. What does that framework bring us? It really shows us, I think, in which countries we are already achieving the hurdles that we’ve set and where we need further improvement. The good news is that I think in most countries, we are meeting the hurdles. At the same time, we’ve looked at countries being over-capitalized from a return perspective and from a capital adequacy perspective. In these countries, we are seeking repatriation of capital also to keep that at head office level and where possible, redistribute that also to our shareholders.

I think that’s the main focus at the moment. Of course, there’s more angles towards capital allocation as such, but I think to further improve, I think the shareholder value by allocating that capital better is the first premise on this one.

Rob Keijsers, Chief Executive Officer, ASA International: Yeah. Thanks, Geert. Hugo, you had a question on MSME. Maybe a bit broader first. I think up until now, until the recent past, we’ve been under-lending our clients rather than over-lending. We need to increase the OLP per client. That was also the operational leverage that I showed at the start of the presentation. Last year, we grew the OLP per client from $180 to $220, and that needs to grow over the next couple of years to roughly $400-$500. It’s not only MSME, it’s really growing into the financial life cycle of clients to really provide the working capital needs that they have. Indeed, if clients outgrow us now, we lose them whilst they cannot step yet into formal banking. This is really about closing the gap.

In the end, it might only be 5% of our clients, but it might be because, of course, the OLP per client is much higher to be roughly 25% or 30% of the overall OLP. I want to add to that we really take this carefully. We don’t want to go into mission drift. We don’t want to lose our client persona. The client persona is changing a little bit. Traditionally, there was the $3-$5 a day kind of female entrepreneur. Based on World Bank data, that’s shifting a little bit to slightly over $8. In order to serve the entire financial life cycle of the client, we want to step into that, but again, in a very careful approach and to max 30% of our OLP and max 5%-7% of our clients. Does that answer your question, Hugo?

Hugo Cruz, Analyst, KBW: Yes. Very helpful. Thank you.

Rob Keijsers, Chief Executive Officer, ASA International: Okay.

Operator: There are no further questions on the conference line. I will now hand over to Jonathan to address written questions submitted via the webcast page.

Jonathan Berger, Head of Investor Relations, ASA International: Thank you. I had a question come through. Which territory do you think will add most to achieving your growth aspirations for the next three years?

Rob Keijsers, Chief Executive Officer, ASA International: Thanks, Jonathan. We see, of course, a significant growth in Africa in general. Sub-Saharan Africa is a growing powerhouse, growing population, young population, very entrepreneurial population. We see our traditional growth markets, Tanzania, Kenya, and Ghana, of course, growing much bigger. I also always take the example, for instance, of Nigeria. 220 million people, 110 million women, 70% in the informal sector, gives you a market potential of 80 million people. Why not grow there substantially compared to what we have today? I think Nigeria is a big one. We see a significant growth in Uganda. We haven’t been large enough there, but it’s quickly catching up. If I look at the demography, the economy, in Uganda compared to Tanzania and Kenya, I think that Uganda will grow also substantially. To be fair, two countries in Asia, Pakistan is growing fast.

It’s also a very large population that has been underserved for years. We’ve under-debted them in light of my previous comments on MSME. The Philippines, for us, has been stable on roughly 360,000 clients for a while. With a revamped leadership and a new focus on operations, I foresee also the Philippines to be a growth engine in the years to come. On top of that, of course, if you talk about new countries, there’s plenty of opportunity to step into new countries. We want to do it carefully. If you are on 1%-3% market share in the countries that we are, we should, could, and must go much deeper in the countries that we are today. Of course, to broaden our market potential and to diversify also risk, we might add another sub-Saharan African country, basically next year.

Jonathan Berger, Head of Investor Relations, ASA International: Thanks, Rob. A couple of other remaining questions. The first one was where is the impact on increasing hardware costs on the digital transformation program?

Rob Keijsers, Chief Executive Officer, ASA International: Yeah, that’s an interesting one. Of course, the AI boom drives up your hardware cost across the board. Wherever you want to stack up your data centers with new hardware, there’s a significant price difference if you compare it to two years ago or even a year ago. It’s remarkable to see what that AI boom does. Look, in general, our IT spend is very much below the market practice, so we have some room to expand. We’ve taken those increased costs into our budgets for next year. Hence, yes, that there is an impact, but as the part of the overall transformation costs and investment that we’re doing, it is still an overseeable amount.

Jonathan Berger, Head of Investor Relations, ASA International: Another additional question has come in. Are you seeing more capable competition entering the market?

Rob Keijsers, Chief Executive Officer, ASA International: Yeah. It’s very interesting to see. Of course, we get a lot of those questions. What we see is on the one hand, you have, of course, the traditional MFIs, MFBs, and they are, of course, competition. I think what we do with the significant investment we do in both leadership and technology, that we have not only a right to play, but certainly a right to win in basically all the markets. Everyone says, of course, yes, but all those fintech players that are fully digital, with an ease of use where you just touch of a button and you’ve got your loan disbursed. That is, of course, true. That is more personal lending than working capital loans. Very short-term, often very high priced. The interest rates are extremely high because of the NPL rates are high.

I always say it’s easy to disburse $1 billion. It’s difficult to collect $1 billion if you don’t have that face-to-face model like we have, where we combine the technology with our entrenchment, basically in all the communities that we are, where we can charge lower rates than all those fintechs can. Yes, of course, it’s competition because our clients will also try. They really cherish the relationship that they have with the loan officer. They understand over time that our interest rates are much better, and they’re losing on the personal touch. Yes, of course, there’s competition, and there’s, in some countries, stiff competition. I think with the offering that we have, and certainly the offering that we grow into with our human-led technology is a winning combination.

Jonathan Berger, Head of Investor Relations, ASA International: The last question that’s come through from the webcast just relates to India, whether there’s any further updates on the whole deconsolidation process that’s mentioned in the materials.

Rob Keijsers, Chief Executive Officer, ASA International: Yeah, that’s a good question. Thanks John. Look, the winding down of the business from an operational perspective is progressing very well. In Q1 of 2026, two-thirds of the branches, of staff, of clients are reduced. That’s a significant step towards the full deconsolidation. Furthermore, of course, important for the fact to relinquish the license is the approval of the RBI. We have very good conversations with the RBI. We’ve answered all their questions. That has been confirmed by the RBI, and we expect their imminent answer. With all that, we hope to really put a close to it before the end of 2026. We’re taking the right steps now, and I see real on-the-ground progress.

Jonathan Berger, Head of Investor Relations, ASA International: Thanks, Rob. That’s everything from a question standpoint. I would like to take the opportunity to thank everybody who has participated in the webcast, those that have submitted questions. By way of a reminder, we have our Q1 business update coming out at the end of this month on the 30th of April, where you can find out further about our performance during the first quarter. Thanks again.

Rob Keijsers, Chief Executive Officer, ASA International: Thanks, Jonathan Berger.

Geert Embrechts, Group Chief Financial Officer, ASA International: Thanks.

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