FIMBank plc - Interim Results

On 14 August 2018, FIMBank plc published its interim results covering the six-month period ended 30 June 2018.

Performance Overview

During the first half of 2018, the FIMBank Group reported a 5.2% increase in net interest income to USD13.4 million (H1 2017: USD12.8 million), reflecting a 6.4% reduction in interest expense (on the back of lower cost on funding sources) whilst gross interest income eased slightly to USD26.3 million from USD26.5 million in the previous comparable period.

Non-interest income surged by 33% to USD14.9 million. The improvement mostly reflects higher net fee and commission income (+2.5%), dividend income (+7.6%) as well as a positive contribution of USD0.98 million from foreign currency operations compared to a loss of USD1.98 million in the first half of 2017.

The financial performance of FIMBank was also boosted by a drop of almost 13% in operating expenses to USD18.5 million reflecting the deconsolidation of Latam Factors S.A. (i.e. the company registered in Chile that is currently placed for sale and in which FIMBank has a 51% shareholding interest) as well as the non-recurrence of some regulatory costs incurred last year which were not repeated in the first half of 2018.

On the other hand, FIMBank registered a net impairment charge of USD2.09 million compared to a positive reversal of impairment charges of USD1.76 million in H1 2017. The latter was largely due to one specific reversal amounting to USD3.6 million. FIMBank explained that it fully implemented the new impairment requirements emanating from the new accounting rule IFRS 09. Moreover, during the first half of 2018, it improved its coverage on key non-performing loans and as a result increased the specific impairments by USD3.4 million.

Meanwhile, FIMBank benefitted from a USD1.14 million gain on trading assets and other financial instruments (H1 2017: loss of USD0.03 million) as well as a USD0.24 million share of profit from equity accounted investees (H1 2017: loss of USD0.25 million). In contrast, however, during the period under review the bank incurred a loss of USD2.08 million related to a fair value adjustment of Latam Factors S.A.

Overall, FIMBank reported a pre-tax profit of USD7 million compared to USD4.23 million in the first six months of 2017. After taking into consideration tax charges of USD0.95 million and a minimal contribution from India Factoring, the net profit attributable to shareholders amounted to USD6.04 million. This represents an improvement of almost 50% over the corresponding period last year.

The condensed Statement of Financial Position as at 30 June 2018, compared to the corresponding figures as at 31 December 2017, shows that total assets expanded by 18.6% to USD1.95 billion mostly due to increases in loans and advances to banks (+USD195.1 million) and loans and advances to customers (+USD130.9 million). Similarly, total liabilities increased by nearly 14% to USD1.67 billion largely reflecting a marked increased customer deposits to USD1.07 billion (+USD225.7 million). Shareholders’ funds climbed to USD275.9 million from USD174.6 as at the end of 2017, mostly reflecting the increase in share capital following the completion of a capital raising exercise of USD105 million earlier this year. As a result, the net asset value per share as at 30 June 2018 stood at USD0.5458.

Dividend

The Directors did not declare an interim dividend.

Outlook

In their commentary, the Directors of FIMBank explained that the results achieved by the bank in the first six months of 2018 are a manifestation of performing fundamentals and also reflect the realisation of a sustainable platform for further success. Indeed, the core performance of FIMBank improved across the key operational pillars covering business and revenue generation, risk management and expense control. The Directors also noted that in the months ahead, the Group will continue exploiting its strong expertise and franchise to grow its diversified product offering.

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FIMBank plc – Interim Financial Statements for the six months ended 30 June 2018.