On 10 August 2011 FIMBank plc published its half-year results to 30 June 2011. During the period under review the Group’s Net Interest Income increased by 21% to US$7.37 million whilst the net interest margin declined from 58% to 51%. Net Fee and Commission income dropped by 18% to US$8.47 million mainly due to lower business volumes from the African and MENA regions. Fair values of the Group’s Trading Assets, mainly the forfaiting book, improved by US$1.22 million (June 2010: loss of US$0.08 million) thanks to the recovery efforts in clawing back past write-downs. The Group’s forfaiting arm also registered net realised gains from traded assets of US$0.10 million (June 2010: US$0.05 million). However trading income, which includes the currency revaluation of on-balance sheet exposures, resulted in a book loss of US$8.73 million when compared to a profit of US$2.28 million registered in the same period last year. The FIMBank Group explained that this loss was offset by a profit of US$10.93 million emanating from realised profits from currency forward and swap contracts held by the Group to manage its currency exposures.
Meanwhile, the net impairment charges for the period under review amounted to US$0.45 million, representing a 79% decline over the same period in 2010. The Group explained that this was mainly the result of an improvement in the MENA region’s overall business environment (which in 2010 contributed to a loss of US$1.63 million) coupled with a continued cautious approach in the Group’s credit risk appetite.
FIMBank’s total operating costs amounted to US$13.78 million, an increase of 22% over last year mainly due to an increase in both administrative and staff costs. Moreover, the share of losses from the Group’s investment in factoring equity investees amounted to US$0.21 million (2010: US$0.31 million). The Indian JV contributed a share of profit of US$0.20 million whilst the other entities in Egypt, Russia and Lebanon are still incurring losses. The Group posted an after tax profit for the first six months of 2011 of US$4.08 million (June 2010: US$3.39 million) resulting in an earnings per share figure of US$0.03.
On the Balance sheet side, the FIMBank Group’s assets during the period under review exceeded the US$1 billion mark. The Group also continued to experience an increase in its loans and advances whilst its liabilities as at 30 June 2011 stood at US$899 million, an increase of US$159 million over the 31 December 2010 level. The Group’s Basle II Capital Adequacy Ratio of 19.4% at the end of June 2011 remained very robust and well above the regulatory minimum of 8%. FIMBank’s liquidity ratio also remained healthy at 49% during the six months under review – above the 30% threshold.
The Group explained that in the current market and political conditions, its approach to business will continue to remain selective and focused on cross-border trade finance with an emphasis on emerging markets. During the second half of the year, the Group will keep monitoring closely the ongoing developments and events taking place. The Group also explained that its strategy of diversification and growth in both products and markets is showing results. In India, the Group hopes to sustain the very encouraging start to its operations while in Dubai, FIMBank hopes to see a continued strengthening of the business and economic environment which would in turn help the performance of its banking activities as well as that of Menafactors.
The FIMBank Group also stated that it continues to believe in the medium to long term prospects of markets like Russia and Egypt while the economic growth and trade expansion in Brazil should boost the prospects for its factoring strategy in that region. Moreover, the Group is confident in a continued positive performance for London Forfaiting Company while the priority of the Bank will remain to navigate it safely through the very challenging business environment.
Download FIMBank’s 2011 Half-Year Results here.