FIMBank plc - Full-Year Results

Tuesday, March 15th, 2016

On 15 March, FIMBank plc published its preliminary financial statements for the year ended 31 December 2015.

Performance Overview

During 2015, the FIMBank Group started to reap the initial benefits of its consolidation strategy. Through the implementation of a number of measures and initiatives, the Group succeeded in curtailing the substantial impairments which marred the 2014 performance, whilst at the same time creating a revenue platform to generate value going forward. Nonetheless, the period under review was also marked by the incurrence of a number of non-recurring expenses which pushed operating expenses beyond the prior year levels.

From an operational point of view, net income for 2015 stood at USD34.9 million compared to a loss of USD4.7 million in the prior year. During 2015, net interest income was higher by 4% from USD28.4 million to USD29.6 million. Similar improvements over 2015 were noted in foreign currency operations and other operating income which were offset by a significantly lower level of fee income from trading assets and documentary credits. Meanwhile, net impairments decreased by 80% to USD10.3 million compared to USD50.7 million in 2014 – largely reflecting additional provisions which were partly offset by reversals of prior year provisions. The equity-accounted investees in Egypt and Brazil also returned improved results, albeit negative, improving from the USD3.2 million loss in 2014 to USD0.8 million in 2015. Furthermore, operating expenses increased by USD7.2 million to USD47.0 million, mainly due to a number of nonrecurring items.

Overall, the FIMBank Group reported a pre-tax loss of USD12.0 million compared to the pre-tax loss of USD53.4 million in 2014. After accounting for a tax credit of USD7.47 million, minority interests of USD0.74 million and USD2.56 million in losses from discontinued operations, the Group’s net loss for the year amounted to USD6.39 million compared to the net loss of USD38.6 million in 2014. This translates into a negative earnings per share of USD0.0221 [2014: USD(0.1519)].

The Statement of Financial Position shows a 2.4% increase in total assets to USD1.44 billion mainly due to increases in the trading book managed by the Group’s subsidiary London Forfaiting Company Limited (LFC). This was partially offset by declines in loans and advances to banks as well as to customers, largely reflecting the re-alignment of the various Group’s portfolios as per the business consolidation strategy and the conversion of short-term bank balances to higher yielding instruments in the available-for-sale portfolio.

Similarly, total liabilities grew by 3.5% to USD1.27 billion as decreases in amounts owed to customers were largely compensated by increases in bank deposits as well as debt securities (issued by London Forfaiting Company) and subordinated loans (provided by Burgan Bank). Overall, the Group’s equity base (excluding minority interests) decreased by USD11 million to USD149.1 million, largely reflecting the loss for the year and net adverse movements in currency translation. The net asset value per share as at 31 December 2015 is of USD0.499 (2014: USD0.538).

Dividend & Bonus Issue

Given the loss incurred during 2015, the Directors are not recommending the payment of a dividend but will instead be recommending a 1 for 25 bonus issue to all shareholders as at the close of trading on 8 April subject to regulatory as well as shareholder approval. The Annual General Meeting (AGM) is scheduled to be held on 10 May 2016. 

Outlook

Looking ahead, the Directors explained that they are encouraged by the positive performance registered during the second half of 2015. The FIMBank Group is expected to maintain this trend during 2016 as it continues to implement its turnaround strategy. Nonetheless, the Directors noted that the challenging macro-economic outlook driven by weaknesses in commodity prices and emerging markets could pose external risks to the business and will exert more pressure on the Group.

Download 

FIMBank plc – Preliminary Statement of Results for the financial year ended 31 December 2015.

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