APS Bank plc - Interim Results

On 27 July 2023, APS Bank plc published its interim financial statements covering the six-month period ended 30 June 2023.

Net interest income increased by 24.6% to €37.1 million (H1 2022: €29.8 million) as the record level of gross interest income of €49.6 million (H1 2022: €36.7 million) offset the higher level of interest expense of €12.5 million (H1 2022: €6.9 million). In this respect, APS explained that the higher interest revenue is attributable to the continued growth of its loan book and higher interest rates across most asset classes. Meanwhile, customer deposits were also repriced higher.

Furthermore, APS recorded €5.23 million from its non-interest income activities, in contrast to the loss of €2.79 million in the same period last year, which was impacted by adverse movements across financial markets which negatively impacted the performance of the APS Funds SICAV. Net fee and commission income increased by 4.7% to €3.97 million (H1 2022: €3.79 million) reflecting higher volumes of business activity and representing the bulk of non-interest income.

APS also recorded a net impairment gain of €0.12 million compared to a net impairment charge of €0.06 million in the first half of 2022. As a result, net operating income amounted to €42.5 million compared to €26.9 million in the corresponding period last year.

On the expenditure side, total operating costs increased by 14.5% to €26.3 million (H1 2022: €23.0 million) driven by higher employee compensation and other administrative expenses. Nonetheless, given the overall improvement in performance, the cost efficiency ratio improved to 62.1% compared to 85.1% in H1 2022.

Moreover, APS also recorded a profit of €0.61 million from its share of results of associates, compared to a net loss of €2.03 million posted in H1 2022.

After accounting for a tax charge of €5.76 million and non-controlling interests of €0.22 million, profit for the period attributable to shareholders amounted to €10.8 million compared to a marginal loss of €0.5 million in the same period last year.

The Statement of Financial Position as at 30 June 2023, when compared to the end of 2022, shows that total assets increased by 10.3% (or €321.5 million) to €3.43 billion principally composed of higher levels of customer loans including syndicated loans (+€227.5 million).

Total liabilities expanded by 10.8% (or €308.4 million) to €3.16 billion largely reflecting the 9.3% (or €251.9 million) increase in customer deposits to €2.96 billion. As a result of the sharper growth in loans than deposits, the loan-to-deposit ratio increased to 87.3% compared to 87.1% as at the end of 2022. Meanwhile, total equity expanded by 5% (or €13.2 million) to €274.6 million (31 December 2022: €261.5 million). Shareholders’ funds amounted to €261.4 million which translates to a net asset value per share of €0.693. As at 30 June 2023, the CET 1 ratio stood at 15.8% (31 December 2022: 15.2%) and the Capital Adequacy Ratio strengthened to 19.3% (31 December 2022: 18.8%).

Dividend

The board declared a net interim dividend of €0.0056 per share (equivalent to €2.1 million) to all shareholders as at close of trading on 23 August 2023. Shareholders can elect to receive the dividend either in cash or through the issuance of new ordinary shares at an attribution price of €0.57 per share.

Outlook

In his commentary, the CEO noted that the Group continued to make exciting inroads in commercial and corporate business, while also increased further the home finance market share. The bank also focused on managing liquidity and capital efficiently, while prioritising the sustainability agenda. The CEO stated that later this year, APS will launch an issuance programme of Tier 2 debt instruments.