FIMBank plc - Interim Results

Tuesday, August 30th, 2005

FIMBank’s 2005 interim results were approved during a Board of Directors meeting held on 29 August 2005.

During the first six months of the year, the Bank’s total operating income increased by 48.3% from USD4.27 million to USD6.34 million. Net interest income grew by 45.3% to USD2.04 million with net fee and commission income rising by 37.1% to USD3.68 million. Other operating income, which includes a dividend of USD0.3 million from the Indian associate company Global Trade Finance Private Ltd. acquired in 2004, increased from USD1.95 million to USD2.54 million. Administrative expenses increased by 20.4% to USD3.67 million, however the Bank’s cost to income ratio improved from 75.3% in June 2004 to 61.1%. Despite a rise in impairment provisions, the Bank’s profit for the half-year climbed from USD0.8 million to USD1.8 million.

On the other hand, the FIMBank Group reported a growth in operating income of 29.6% to USD7.78 million. Net interest income generated by the Group dropped by 10.8% to USD0.95 million, while net fee and commission income, which includes income from the Bank’s fully-owned subsidiary London Forfaiting Company, increased by 43.8% to USD4.29 million during the period under review. Other income, mainly composed of net trading income generated by LFC, also showed strong growth at 30%. Despite, a rise in Group administrative expenses by 18.4% to USD5.87 million, the Group’s cost to income ratio taking into account the share of profits from the Indian associate company of USD0.57 million, dropped from 86.7% in June 2004 to 73.5%. In the first six months of 2005, the Group’s operating profit before impairment provisions more than doubled from USD0.8 million to USD1.65 million. Impairment provisions amounted to USD0.37 million. Further to the implementation of IFRS 3 "Business Combinations", no amortisation of goodwill took place in 2005, whereas in the first six months of 2004, the Group had amortised goodwill of USD0.75 million which resulted in a loss before tax of USD0.03 million. The absence of goodwill amortisation in 2005 coupled with the share of profits from Global Trade Finance Private Ltd. amounting to USD0.57 million, boosted the Group’s profit before tax in the first six months of the year to USD1.85 million. The FIMBank Group registered a profit after tax of USD1.64 million during the period under review translating into an earnings per share figure of 2c49.

The Group’s total assets grew by 14% during the first six months of the year and now stand at USD246.1 million as at 30 June 2005, mainly as a result of an increase in the size of LFC’s forfaiting book which grew from USD63.3 million in December 2004 to USD82.95 million. On the liabilities side, amounts owed to banks increased from USD65.7 million in December 2004 to USD90.6 million with customers deposits at USD102.7 million as at June 2005. Shareholders’ funds of USD50 million translate into a Group book value per share of USD0.76.

In the Review of Performance published with these interim results, the Directors noted that "these interim results are the strongest in the Group’s and Bank’s history and, as anticipated in the 2004 Annual Report, the strategy of market and product diversification continues to provide considerable scope for profit maximisation. The Board is optimistic its strategy, supported by the business momentum of the first half of 2005, makes encouraging prospects for the remainder of the year".

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