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APS Bank plc – Quarterly Update

Jonathan Falzon

April 25, 2025

Market News
25 April, 2025
5 min read
Market News
25 April, 2025
5 min read

Following last week's article detailing the performance of the S&P 500 index in 2025, it is worth devoting time to review the developments across the European equity markers in my last article of the year.

On 24 April 2025, APS Bank plc published a Quarterly Financial Update providing information about its performance in Q1 2025 when compared to the same period in 2024.

Net interest income remained practically unchanged at €16.7 million as the increase in gross interest income (+€1.4 million to €29.6 million) was offset by higher interest expenses (+€1.4 million to €12.9 million). Nonetheless, net interest income improved by 1.7% from Q4 2024 amid lower interest expenses.

APS registered a decrease of 10.6% in non-interest income to €2.3 million as the foreign exchange losses and negative fair value movements in relation to the consolidation of the APS Diversified Bond Fund outweighed the higher net fee and commission income.

APS also recorded a net impairment loss of €0.3 million, which however was lower than the €1.26 million charge in the corresponding period last year. The bank explained that the charges mainly relate to exposures within the local commercial loan book and international syndicated lending portfolio.

Total operating costs increased by 18.1% to €15.9 million driven by higher depositor compensation scheme costs and non-recurring expenses of €1.1 million directly attributable to the Bank’s bid for HSBC Bank Malta plc. APS stated that these advisory and due diligence fees are expected to taper off since APS announced its withdrawal from the process.

Overall, the APS Group reported a quarterly profit before tax of €2.88 million (Q1 2024: €5.03 million) and a net profit for the period of €1.45 million (Q1 2024: €3.45 million).

The Statement of Financial Position as at 31 March 2025, when compared to the position as at the end of 2024, shows that total assets increased by 1.6% to €4.23 billion. Customer loans, including syndicated loans, grew by 1.7% to €3.25 billion while cash with the Central Bank of Malta increased by 10.7% to €420 million.

Total liabilities also grew by 1.7% to €3.92 billion largely driven by a 2.4% increase in customer deposits to €3.76 billion. As a result, the loan-to-deposit ratio remained relatively unchanged at 86%.

Shareholders’ funds increased by 0.5% to €297 million, which translates into a net asset value per share of €0.783 (31 December 2024: €0.779). The Bank’s CET 1 ratio eased to 14.1% (31 December 2024: 14.6%) and the Capital Adequacy Ratio moved marginally lower to 19.5% (31 December 2024: 20.1%).

Commenting on the Q1 2024 performance, APS Bank CEO explained that the Bank continues to deliver a strong performance marked by steady, all-round growth, gaining market share while offering a comprehensive suite of services. He noted that the trend of declining interest rates is favourable since the net interest margin is anticipated to continue widening.

The CEO explained that although APS exited the bidding process for HSBC Bank Malta plc, the Group is actively looking at new strategic opportunities. Meanwhile, APS is considering a capital increase later in the year.

The article contains public information only and is published solely for informational purposes. It should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this article. Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is under no obligation to update or keep current the information contained herein. Since the buying and selling of securities by any person is dependent on that person’s financial situation and an assessment of the suitability and appropriateness of the proposed transaction, no person should act upon any recommendation in this article without first obtaining investment advice. Rizzo Farrugia, its directors, the author of this article, other employees or clients may have or have had interests in the securities referred to herein and may at any time make purchases and/or sales in them as principal or agent. Furthermore, Rizzo Farrugia may have or have had a relationship with or may provide or has provided other services of a corporate nature to companies herein mentioned. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security mentioned in this article. Neither Rizzo Farrugia, nor any of its directors or employees accepts any liability for any loss or damage arising out of the use of all or any part of this article. Additional information can be made available upon request from Rizzo, Farrugia & Co. (Stockbrokers) Ltd., Airways House, Fourth Floor, High Street, Sliema SLM 1551. Telephone: +356 2258 3000; Email: info@rizzofarrugia.com; Website: www.rizzofarrugia.com © 2021 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved. This article may not be reproduced or redistributed, in whole or in part, without the written permission of Rizzo Farrugia. Moreover, Rizzo Farrugia accepts no liability whatsoever for the actions of third parties in this respect.

This article was produced by Edward Rizzo, Director at Rizzo Farrugia, which is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange. The company’s registered address is at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta.

The article contains public information only and is published solely for informational purposes. It should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this article. Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is under no obligation to update or keep current the information contained herein. Since the buying and selling of securities by any person is dependent on that person’s financial situation and an assessment of the suitability and appropriateness of the proposed transaction, no person should act upon any recommendation in this article without first obtaining investment advice. Rizzo Farrugia, its directors, the author of this article, other employees or clients may have or have had interests in the securities referred to herein and may at any time make purchases and/or sales in them as principal or agent. Furthermore, Rizzo Farrugia may have or have had a relationship with or may provide or has provided other services of a corporate nature to companies herein mentioned. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security mentioned in this article. Neither Rizzo Farrugia, nor any of its directors or employees accepts any liability for any loss or damage arising out of the use of all or any part of this article. Additional information can be made available upon request from Rizzo, Farrugia & Co. (Stockbrokers) Ltd., Airways House, Fourth Floor, High Street, Sliema SLM 1551. Telephone: +356 2258 3000; Email: info@rizzofarrugia.com; Website: www.rizzofarrugia.com © 2021 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved. This article may not be reproduced or redistributed, in whole or in part, without the written permission of Rizzo Farrugia. Moreover, Rizzo Farrugia accepts no liability whatsoever for the actions of third parties in this respect.

This article was produced by Edward Rizzo, Director at Rizzo Farrugia, which is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange. The company’s registered address is at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta.

On 24 April 2025, APS Bank plc published a Quarterly Financial Update providing information about its performance in Q1 2025 when compared to the same period in 2024.

Net interest income remained practically unchanged at €16.7 million as the increase in gross interest income (+€1.4 million to €29.6 million) was offset by higher interest expenses (+€1.4 million to €12.9 million). Nonetheless, net interest income improved by 1.7% from Q4 2024 amid lower interest expenses.

APS registered a decrease of 10.6% in non-interest income to €2.3 million as the foreign exchange losses and negative fair value movements in relation to the consolidation of the APS Diversified Bond Fund outweighed the higher net fee and commission income.

APS also recorded a net impairment loss of €0.3 million, which however was lower than the €1.26 million charge in the corresponding period last year. The bank explained that the charges mainly relate to exposures within the local commercial loan book and international syndicated lending portfolio.

Total operating costs increased by 18.1% to €15.9 million driven by higher depositor compensation scheme costs and non-recurring expenses of €1.1 million directly attributable to the Bank’s bid for HSBC Bank Malta plc. APS stated that these advisory and due diligence fees are expected to taper off since APS announced its withdrawal from the process.

Overall, the APS Group reported a quarterly profit before tax of €2.88 million (Q1 2024: €5.03 million) and a net profit for the period of €1.45 million (Q1 2024: €3.45 million).

The Statement of Financial Position as at 31 March 2025, when compared to the position as at the end of 2024, shows that total assets increased by 1.6% to €4.23 billion. Customer loans, including syndicated loans, grew by 1.7% to €3.25 billion while cash with the Central Bank of Malta increased by 10.7% to €420 million.

Total liabilities also grew by 1.7% to €3.92 billion largely driven by a 2.4% increase in customer deposits to €3.76 billion. As a result, the loan-to-deposit ratio remained relatively unchanged at 86%.

Shareholders’ funds increased by 0.5% to €297 million, which translates into a net asset value per share of €0.783 (31 December 2024: €0.779). The Bank’s CET 1 ratio eased to 14.1% (31 December 2024: 14.6%) and the Capital Adequacy Ratio moved marginally lower to 19.5% (31 December 2024: 20.1%).

Commenting on the Q1 2024 performance, APS Bank CEO explained that the Bank continues to deliver a strong performance marked by steady, all-round growth, gaining market share while offering a comprehensive suite of services. He noted that the trend of declining interest rates is favourable since the net interest margin is anticipated to continue widening.

The CEO explained that although APS exited the bidding process for HSBC Bank Malta plc, the Group is actively looking at new strategic opportunities. Meanwhile, APS is considering a capital increase later in the year.