FIMBank plc - Interim Directors’ Statement

Wednesday, May 20th, 2015

On 19 May, FIMBank plc published its Interim Directors’ Statement updating the market on its performance since the start of the 2015 financial year.

The Directors explained that after the disappointing results of 2014, FIMBank plc started 2015 with changes in senior management and a revised business strategy which includes a consolidation of previous investments and a closure of certain loss-making activities. The turnaround strategy of the Group is based on the following six pillars:

i)                 Retaining a focus on global trade finance as a central pillar to the Group’s business model;

ii)                An emphasis on consolidation and profit improvement from the Group’s existing core activities;

iii)               To allocate more resources to those entities within the Group’s international factoring businesses capable of generating greater profitability;

iv)               A selective approach to new business growth and further strengthening of governance and risk structures;

v)                Restructuring or discontinuing non-profitable segments and identifying efficiencies to ensure that all resources are productively allocated;

vi)               Strengthening recovery efforts on impaired exposures.

The Directors also commented that liquidity and funding have been maintained at very prudent levels during the last few months but during the next six months the Group anticipates a growth of new business opportunities. In the meantime, the Group is continuing with the process of exiting from its factoring business in Russia and discussions are being held to pursue various options including a sale of this business although the costs associated with exiting this investment are likely to have some additional impact during 2015.

The business of India Factoring & Financial Solutions Limited, a major contributor to the Group’s losses in 2014, is now much more stable and whilst new impairments were experienced in 2015, these relate to legacy issues which were largely anticipated. At Bank level, FIMBank also experienced some relatively small increases in net impairments but the Group’s overall impairments were in line with the 2015 budget. Recovery efforts have started with a dedicated team focused on this activity to generate positive results over the medium term.

In conclusion, the Directors noted that the core fundamentals are being enhanced in order to return the Group to sustainable profit levels within a relatively short time frame.

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