FIMBank plc - Interim Results

Thursday, August 10th, 2017

On 10 August, FIMBank plc published its interim results covering the six months ended 30 June 2017.

Performance Overview

During the period under review, the Bank reported a 22.1% increase in gross interest income to USD26.46 million reflecting higher levels of factoring facilities, receipt of overdue interest on delinquent assets recovered in the first half of 2017 as well as higher spreads on loan facilities which were partially offset by lower interest on fixed income investments. Furthermore, interest expense also grew by 15.2% to USD13.68 million mainly due to higher costs of funding. Nonetheless, the net interest income still increased by 30.5% to USD12.78 million.

Net fee and commission income also grew by 28.5% to USD9.18 million on the back of higher turnover levels on factoring and forfaiting assets. On the other hand, net results from foreign currency operations moved into negative territory with a loss of USD1.98 million compared to a profit of USD0.26 million in the first six months of 2016 following an increase in currency swaps used for risk management purposes.

Overall, the Group’s total operating income improved by 11.6% to USD23.93 million reflecting the efforts in enhancing revenue generation and product offering, benefitting from risk management and recovery strategies whilst optimising on capital and funding resources.

FIMBank’s non-interest expenses also increased by 12.5% to USD21.22 million mainly due to higher regulatory costs as well as following the consolidation of Egypt Factors which until June 2016 was still accounted for using the equity method.

The Directors positively noted that the Group registered USD4.6 million in recoveries through the Bank as well as the Indian and Egyptian businesses including USD3.59 million from one particular account. However, most of these recoveries were offset by other impairment provisions amounting to USD3.25 million spread across legacy issues and other uncovered credits. As a result, FIMBank reported net recoveries of USD1.76 million during the period under review compared to a net USD0.19 million impairment in the first six months of 2016.

The Group’s income statement also includes a USD0.25 million share of loss from its shareholding in Brasilfactors which represents a 4.8% increase from the share of loss incurred in the corresponding period of 2016.

As a result, the Group’s pre-tax profit for the period under review amounted to USD4.23 million which is almost double the USD2.15 million pre-tax profit registered in the first six months of 2016. After accounting for tax and minority interest, the Group’s net profit amounted to USD4.06 million, a significant improvement over the USD1.11 million net profit registered in the first half of 2016. This translates into an earnings per share of USD0.013 (H1 2016: USD0.0036).

The Statement of financial position as at 30 June 2017, compared to the corresponding figures as at 31 December 2017, reveals a 0.4% contraction in total assets to USD1,733.43 million as growth in loans and advances to customers as well as increases in Balances with the Central Bank of Malta, Treasury Bills and cash were offset by declines in trading assets as well as loans and advances to banks. Similarly, total liabilities decreased by 0.9% to USD1,551.84 million as the growth in amounts owed to banks and in unsecured promissory notes were offset by declines in amounts owed to customers and derivative liabilities held for risk management. Overall, the Group’s equity base increased by 4.4% to USD158.23 million largely reflecting the profit registered during the period under review. This translates into a net asset value per share of USD0.503 (Dec 2016: USD0.482).

Dividend

The Directors did not declare an interim dividend.

Outlook

In their concluding remarks, the Directors noted that FIMBank is evolving into a stronger banking institution based on sound business discipline, centrally-aligned operations and effective management of enterprise risks. Going forward, FIMBank will continue to focus on revenue maximisation, maintaining portfolio quality and concurrently bolster its capital position in order to elicit further asset growth. Achieving these targets would allow FIMBank to take its customer experience to a superior level, support scale and generate enterprise value to its various stakeholders. 

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FIMBank plc – Interim Financial Statements for the six months ended 30 June 2017.

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