APS Bank plc - Quarterly Update

On 27 April 2023, APS Bank plc published a Quarterly Financial Update providing information about its performance in Q1 2023 when compared to the same period in 2022.

Net interest income surged by 24.9% to €18.4 million (Q1 2022: €14.7 million) as the increase in absolute terms in gross interest income (+€5.77 million to €23.8 million) amid the continued strong growth in the loan book, supported by the higher interest income from treasury assets, outweighed the increase in interest expenses (+€2.11 million to €5.42 million).

APS also registered a 2.6% increase in non-interest income to €2.28 million, driven by the growth in the Bank’s customer base. Furthermore, APS recognised a net gain on financial assets of €0.67 million compared to the net loss of €3.62 million in 2022 amid the considerable adverse movements across financial markets which had negatively impacted the performance of the APS Funds SICAV.

On the expenditure side, total operating costs increased by 24.5% to €12.8 million (Q1 2022: €10.3 million) largely reflecting higher staff costs. However, due to the sharper increase in income, the cost efficiency ratio improved to 59.9% compared to 77.4% in Q1 2022. Meanwhile, APS recorded a marginally higher level of net impairment charges totalling €0.91 million compared to €0.58 million in the first three months of 2022.

Overall, the APS Group reported a quarterly profit before tax of €7.91 million compared to €1.85 million in Q1 2022.

The Statement of Financial Position as at 31 March 2023, when compared to the position as at the end of 2022, shows that total assets increased by 4.8% to €3.26 billion. In particular, customer loans including syndicated loans grew by 5.2% to €2.48 billion mainly reflecting the continued demand for home loans. Cash and reserves with the Central Bank of Malta surged by 16.5% to €100.1 million.

Total liabilities grew by 4.9% to €2.99 billion largely driven by a 2.9% increase in customer deposits to €2.79 billion. As a result of the sharper growth in loans than deposits, the loan-to-deposit ratio climbed to 89% compared to 87% as at the end of 2022.

Shareholders’ funds increased by 3.1% to €258.2 million, which translates into a net asset value per share of €0.704 (31 December 2022: €0.683). The Bank’s CET 1 ratio eased to 15.1% (31 December 2022: 15.2%) whilst the Total Adequacy Ratio moved marginally lower to 18.7% (31 December 2022: 18.8%).

Commenting on the Q1 2022 performance, APS Bank CEO Mr Marcel Cassar explained that: “Our commitment remains to manage the transmission of interest rate developments with the concerns of all our customers in mind. Against this background, our business model continues to be underpinned by strong investor support and market confidence, which we reciprocate by keeping the customer central to all our activities. This places continuous demands and challenges on our resources, not least on the need to accelerate transformation and to build on the most valuable resource of all – human capital. Overall, it has been a great start to the year, and we look forward to the coming months with optimism while mindful that global economic recovery remains fragile.”