FIMBank plc - Full-Year Results

On 11 March 2020, FIMBank plc published the preliminary statement of annual financial results for the year ended 31 December 2019.

Performance Overview

During 2019, FIMBank generated a record of USD32.3 million (+3.6%) in net interest income as the 10% decline in gross interest income to USD50.5 million was outweighed by the sharper drop of 27% in interest expense to USD18.2 million. In this respect, FIMBank explained that the execution of a de-risking process resulted in a temporary asset reduction and accordingly, lower new business and stock levels were carried out during the year. On the other hand, the contraction in the interest expense reflects initiatives that led to the creation of funding efficiencies as well as the curtailment in the amount held of non-remunerative excess liquidity. As a result, the bank’s net interest margin also increased to a multi-year high of 64%.

In contrast, non-interest income fell significantly to just under USD19 million compared to USD27.5 million in the 2018 financial year, largely reflecting much lower amounts generated in net fee and commission income (-USD5.17 million to USD12.5 million) and dividend income (-USD4.07 million to USD3.59 million). In this respect, de-risking in the bank’s core trade and commodity finance portfolio also had a considerable negative impact on fee revenues. Conversely, FIMBank reported a 30.5% increase in net income from foreign currency operations and other operating income to USD2.88 million reflecting increased volume of foreign currency transactions as well as more efficient use of foreign currency swaps.

In aggregate, during 2019, FIMBank generated total operating income of USD51.3 million which is 12.7% lower than the corresponding figure of USD58.7 million in the 2018 financial year.

On the expenses side, operating costs contracted by 1.5% to USD37 million (2018: USD37.6 million). Similarly, net impairment losses eased by 1.6% to USD13.1 million as the recognition of additional impairments erased recoveries. Meanwhile, net results from trading assets and other financial instruments remained broadly unchanged at USD6.08 million whilst FIMBank’s financial performance was not impacted by the repetition of one-off items which, in 2018, had a negative effect of USD0.84 million.

Overall, FIMBank reported a pre-tax profit of USD7.26 million compared to USD13 million in 2018. After accounting for a tax charge of USD2.73 million and minority interests of USD0.11 million, the net profit for the year amounted to USD4.42 million compared to USD10.2 million in 2018. This translates into a return on average equity of 1.57% (2018: 4.48%).

The Statement of Financial Position shows a 1.3% increase in total assets to USD1.89 billion. However, the de-risking process led to a significant shift in the bank’s portfolios. In fact, loans and advances to banks and customers fell by USD90.6 million and financial assets held at fair value also dropped by USD56.2 million. In contrast, trading assets grew by USD113 million and treasury balances increased by USD56.4 million.

Total liabilities also increased by 1.4% to USD1.61 billion largely reflecting higher amounts owed to customers. Accordingly, shareholders’ funds grew by 0.8% to USD282.5 million which translates into a net asset value per share of USD0.5407 (31 December 2018: USD0.5367). FIMBank’s capital ratios remained above regulatory requirements as the CET1 ratio stood at 16.9% as at the end of 2019. This is lower than the ratio of 17.6% as at the end of the previous financial year.


In their commentary to the 2019 financial results, the Directors of FIMBank explained that during the year, the bank embarked on a de-risking process with the aim of strengthening the overall quality of its portfolios by proactively seeking to optimise business fundamentals whilst also reacting to market, industry and regulatory developments. During the year, FIMBank also strengthened the structures of its credit transactions, migrated to superior counterparty profiles and also reduced its concentration on product, single obligor and geographical presence. The bank also noted that although recoveries were slower than expected, these are expected to pick up in 2020.

With respect to its main subsidiaries, London Forfaiting Company Limited had another successful year and delivered strong results as it expanded its portfolio with a corresponding increase in trading volumes. In India, the bank’s subsidiary achieved a modest result but managed to build an adequate business pipeline, whilst in Egypt, FIMBank recorded a stable performance and is also experiencing a growing business pipeline and asset levels at superior margins despite the higher level of competition.

For 2020, FIMBank is expecting to grow the key areas of its business by building on core established strengths by applying a rigorous approach to risk. In this respect, the bank explained that it will continue pursuing opportunities and offering differentiated products as well as exploit its expertise in the industries and geographies across the clients’ supply chains. Concurrently, FIMBank will keep assessing the viability of its different businesses, looking for scalability and returns as the key drivers to generate consistent returns and value.

Recoveries of non-performing assets will remain a focus area, both from an income perspective as well as in improving the overall portfolio quality. Furthermore, in a context of ever more tighter regulation and a competitive business context, FIMBank explained that attention to controls, operations and governance remains of paramount importance for the achievement its strategic objectives.


FIMBank plc – Preliminary Statement of Annual Results for the financial year ended 31 December 2019.