FIMBank plc - Interim Results

FIMBank’s 2006 interim results were approved during a Board of Directors meeting held on 11 August 2006. As in the previous year the Board of Directors did not declare an interim dividend.

The Group
During the first six months of the year, the Group total income surged 41.3% to US$11 million. Net interest income continued to decrease as FIMBank’s wholly-owned subsidiary, London Forfaiting Company, was largely supported by the Group for its increased funding requirements. Forfaiting gains more than doubled to US$4.7 million; other net trading income amounted to US$0.7 million, up from US$0.2 million with dividend income also increasing to US$0.48 million. Group operating expenses grew by 22.5% to US$7.5 million reflecting the increased activity and operating base of the Group including new ventures and engagement of additional staff. The contribution from the Group’s associate company (GTF in India) amounted to US$1.09 million, 90.5% higher than the comparative period last year. The Group’s pre-tax profit in the first half of 2006 climbed to US$3.4 million, with an after-tax profits figure of US$3.1 million.

The Bank
Meanwhile, the Bank’s total income increased by just under 30% to US$8.2 million. Net interest income grew by 10.7% to US$2.3 million with net fee and commission income rising by 16.2% to US$4.3 million. Other net trading income amounted to US$0.67 million with dividend income surging to US$0.99 million. The Bank’s non-interest expenditure rose by 45% to US$5.6 million. The Directors attributed this rise to the Bank’s involvement in providing administrative and financial support to its subsidiaries including London Forfaiting Company and other costs related to the new operations being undertaken in Latin American and Middle Eastern countries. After accounting for impairment allowances and taxation, the Bank posted a profit of US$1.72 million in the first half of the year (2005: US$1.79 million).

The Group balance sheet as at 30 June 2006 shows total assets of US$582 million, up from US$295 million in December 2005. Loans and advances to customers increased to US$64.5 million, loans and advances to banks surged to US$312.6 million with financial assets held at fair value through profit or loss (mainly composed of bonds and LFC’s forfaiting portfolio) rising to US$182.2 million. The largest source of funding growth came from correspondent bank relationships in new emerging markets which contributed over US$200 million in call balances and term deposits as at the balance sheet date. Customer deposits increased by 13% since 31 December 2005 to US$126 million. Group shareholders’ funds as at 30 June 2006 amounted to US$57.7 million, resulting in a net asset value per share of US$0.67.

In the Review of Performance published with these interim results, the Directors explained that the interim figures demonstrate the strong growth being registered by the Group in all its business areas and, particularly, reflect the result of the strategy of market and product diversification which is providing considerable scope for profit maximisation. Whilst core banking revenues continued to grow during the period under review, an increasing portion of Group net income was contributed by subsidiaries and affiliates.

The Directors emphasised that the Group’s projects for developing business via alliances with strong partners in new markets, as well as the focus on diversifying from the traditional banking and trade finance products, continue to be main drivers of the FIMBank Group’s results. The Board also continues to explore avenues of capital improvement, which would further support the growth and overall risk profile of the business. The Board of Directors stated that it remained optimistic about the overall business strategy and confirmed that there are encouraging prospects and the strong momentum achieved in the first half of 2006 will continue for the remainder of the year.

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