FIMBank plc - Full-Year Results

On 24 April 2024, FIMBank plc published the Annual Report and Financial Statements for the year ended 31 December 2023. The financial statements for 2022 were restated, principally to reflect the reclassification of long-term debt securities from ‘Financial investments at amortised cost’ to ‘Financial investments at fair value through other comprehensive income’.

Performance Overview

Net interest income surged by 26.2% to USD55.2 million (2022: USD43.8 million) as the increase in interest income (+USD34.1 million to USD95.5 million) outweighed the increase in interest expense (+USD22.6 million to USD40.2 million), reflecting the impact of higher interest rates.

FIMBank reported an expense of USD3.5 million from its non-interest activities which however is lower than the USD5 million loss from the restated figures of last year. The lower expense was driven by lower net fee and commission expenses and lower net trading losses. The Group also incurred a reduction in fair value of investment property of USD1.4 million.

The Group also registered net impairment losses of USD1.96 million, which were a substantial improvement over the net impairments of USD25.3 million in 2022. As a result, operating income amounted to USD49.6 million compared to USD13.5 million in the previous year.

Total operating costs rose by 14.6% to USD43.8 million reflecting higher administrative expenses.

Overall, FIMBank reported a pre-tax profit of USD5.79 million in contrast to the loss of USD24.7 million as restated for 2022. After accounting for a tax expense of USD5.79 million and the profit attributable to minority interests of USD0.04 million, the net loss attributable to shareholders amounted to USD0.03 million (2022: loss of USD26.3 million).

The Statement of Financial Position as at 31 December 2023 shows that total assets increased by 1.6% (or USD24.5 million) to USD1.58 billion, largely composed of customer loans of USD0.43 billion, trading assets of USD0.37 billion and balances with the Central Bank, treasury bills and cash of USD0.35 billion. Total liabilities increased by 1.1% (or USD15.8 million) to USD1.40 billion, largely composed of amounts owed to customers totalling USD0.93 billion and amounts owed to institutions and banks of USD0.41 billion. Shareholders’ funds advanced by 5.1% (or USD8.8 million) to USD178.8 million which translates into a net asset value per share of USD0.3422 (31 December 2022: USD0.3254).

FIMBank’s CET1 ratio and total capital ratio improved to 18.3% compared to 17.8% as at the end of 2022.

Outlook

The Directors explained that while macroeconomic conditions continue to provide opportunities and risks, the Group will proactively seek out business opportunities with a focus on achieving risk-adjusted returns, all while maintaining alignment with its risk appetite and regulatory capital requirements. Significant importance is placed  on the Group’s  cost structure,  IT  and  data  architecture  design  and  integration,  as well  as  the  resources and capabilities of the Group.

The Group noted positively that another MFSA Supervisory Review and Evaluation Process (SREP) was concluded in the early months of 2024 and resulted in a 0.8% reduction of the Group’s Pillar 2 requirement. The Directors explained that MFSA acknowledged the Group’s improvements in profitability and its broadly stable funding and liquidity profile. The MFSA also noted the constant efforts by management to decrease the non-performing loan portfolio below regulatory thresholds, and the Board has satisfactorily addressed the qualitative requirements and recommendations stemming from the SREP performed in 2021.