FIMBank plc - Interim Directors’ Statement

On 17 May, FIMBank plc published its Interim Directors’ Statement updating the market on developments since the start of 2013.

The announcement explained that the most significant development for FIMBank in 2013 will be the introduction of new institutional shareholders. Burgan Bank S.A.K. of Kuwait and United Gulf Bank B.S.C. (UGB) of Bahrain will be acquiring a controlling interest in the Bank through a multi-step approach as approved by shareholders during an Extraordinary General Meeting held on 31 January 2013 once the necessary regulatory approvals are granted. The Directors reiterated that the arrival of these two institutional shareholders should help FIMBank in developing and growing its business as well as improving its credit rating and strengthening its capital ratios.

In the meantime, the Directors (comprising also senior officials of Burgan and UGB following their appointment at the Annual General Meeting held on 2 May) explained that London Forfaiting Company Ltd continues to show good trading results and consistent growth. Similarly, Menafactors (the Dubai-based subsidiary) is maintaining the generally positive trend seen in 2012 as the outlook for business continues to improve. Furthermore, FIMBank is also experiencing a growing interest in its commodity finance business and is making inroads into trade-related transactional banking with new clients and markets in spite of the tough challenges in relation to economies of scale and new regulations.

On the other hand, the outlook for the other factoring joint-ventures is less positive. Egypt Factors continued to face challenging market conditions. Similarly, FactorRus is facing tough times including the possibility of incurring some impairments. The performance of India Factors has also declined to levels more consistent with the slower economic forecasts for the region. As such, this joint-venture is now placing more emphasis on safety rather than growth. Meanwhile, BrasilFactors has maintained its promising start and is now expected to break-even in the current year.

Overall, revenue since the start of 2013 is in line with that registered in the same period in 2012. Moreover, the Directors also expect profits to follow the trend of the previous year excluding the potential impact from the possible impairments at FactorRus.