APS Bank plc - Interim Results

On 28 July 2022, APS Bank plc published its interim financial statements covering the six-month period ended 30 June 2022.

Net interest income surged by 13.2% to €29.8 million (H1 2021: €26.3 million) as the continued strong growth in the loan book was also supported by the more efficient management of the bank’s funding base. In fact, gross interest income rose by 10.4% to €36.7 million compared to €33.2 million in H1 2021, whilst interest expense trend marginally lower to €6.88 million despite the marked increase in customer deposits.

On the other hand, APS recorded a loss of €2.79 million from its non-interest income activities reflecting the considerable adverse movements across financial markets which negatively impacted the performance of the APS Funds SICAV. Excluding these negative unrealised movements which amounted to €8.16 million, APS still recorded strong growth from its other non-interest income activities. Indeed, net fee and commission income surged by 35.1% to €3.79 million (H1 2021: €2.8 million) reflecting higher volumes of business activity in loans, payments, and cards, as well as a wider customer base which provides new sources of revenue generation. Moreover, the Bank also recorded an increase in other operating revenues which amounted to €1.58 million compared to €0.51 million in H1 2021.

On the expenditure side, total operating costs increased by 15.9% to €23 million (H1 2021: €19.8 million) reflecting continuous investments in HR, technology, and operations/processes, as well as higher contribution to the Deposit Compensation Scheme. Given the negative impact on income from the adverse market movements, the cost efficiency ratio deteriorated to 85.1% compared to 65.2% in H1 2021. Meanwhile, APS recorded a marginal net impairment charge of €0.06 million compared to a net impairment gain of €1.71 million in the first half of 2021, as the Bank continues to maintain a prudent view of credit in line with its risk appetite and mindful of general economic conditions and outlook. Moreover, APS also recorded a net loss of €2.03 million from its share of results of associates (including IVALIFE Insurance Limited) compared to the much lower loss of €0.05 million posted in H1 2021.

After accounting for a tax charge of €4.43 million and non-controlling interests, APS reported a net loss of €0.5 million. However, on a standalone basis, the Bank registered a net profit of €9.27 million which is 24.1% higher than the net profit of €7.47 recorded in H1 2021.

The Statement of Financial Position as at 30 June 2022, when compared to the end of 2021, shows that total assets increased by 9.3% (or +€259.3 million) to €3.05 billion reflecting higher levels of customer loans (+€131.4 million), cash and balances with the CBM (+€83.7 million), as well as investments (+€25.6 million).

Similarly, total liabilities expanded by 8.6% (or +€221.2 million) to €2.8 billion largely reflecting the 7.7% increase (or +€186.9 million) in customer deposit to €2.62 billion. As a result of the sharper growth in deposits than loans, the loan-to-deposit ratio eased to 83.9% compared to 85% as at the end of 2021. Meanwhile, as total equity expanded to €258.8 million (31 December 2021: €220.8 million) on the back of the funds received from the IPO, the CET 1 and the Capital Adequacy ratios strengthened to 16.4% (31 December 2021: 13%) and 20.3% (31 December 2021: 16.9%) respectively.

Commenting on the H1 2022 performance, APS Bank CEO Mr Marcel Cassar explained that: “As anticipated in our Quarterly Financial Update of April, the first half of 2022 got off to an extraordinary start as the impetus which developed on the back of a post-Covid economic rebound experienced a new series of shocks. Most prominently, the invasion of Ukraine and the amplified supply chain issues in both energy and food prices have fuelled inflationary pressures and resultant interventions from Central Banks. Such global developments are felt also in our widely open economy through higher costs of inputs and imported goods, being partly offset by Government subsidies which however contribute to a build-up in public debt. Against this backdrop, the Maltese economy is experiencing strong growth, boosted by a healthier than expected tourism season and buoyed by the removal from the FATF grey list.”

“While an increase in interest rates should generally be expected to benefit bank margins, it may also impact the ability of certain borrowers to service their repayments, raising the spectre of asset quality deterioration. It is still early to forecast how this new phase of interest rate normalisation will evolve; however the Bank is entering it with a strong balance sheet, fortified by a high capital pile, ample liquidity and a conservative risk appetite resulting from a tried and tested business model.”

“As the market absorbs the policy adjustments and hopefully moves into a calmer environment, we should expect values of financial instruments to slowly regain the unrealised losses of recent months. Throughout this first half, APS Bank continued strengthening the fundamentals in the core business lines, asset quality and capital. The balance sheet is stronger, fortified by a high capital pile, ample liquidity, and conservative risk appetite resulting from a tried business model. Riding on the back of a hugely successful IPO, we look at the months ahead with confidence and optimism for the opportunities they may hold.”


APS is recommending a net interim dividend of €0.005 per share through the issuance of new ordinary shares. Subject to any regulatory approvals required, an Extraordinary General Meeting will be convened to approve the issuance of new shares in satisfaction of this interim dividend. A separate announcement will be issued in due course announcing the date of the EGM for later in the year and after the summer period.