APS Bank plc - Full-Year Results

On 13 March 2025, APS Bank plc published its Annual Report and Financial Statements for the financial year ended 31 December 2024.

Net interest income dropped by 11.0% to €65.5 million (2023: €73.6 million) as higher level of gross interest income (+€9.1 million to €114.7 million) was offset by the surve in interest costs (+€17.1 million to €49.2 million). In this respect, APS explained that the growth in net interest income was mainly driven by the continued growth across the retail and commercial loan portfolios. Meanwhile, the surge in interest expenses was attributed to higher interest rates to depositors and the full-year impact of the subordinated bond issuance at the last quarter of 2023.

Excluding movements of financial instruments, non-interest income surged by 32.6% to €11.6 million reflecting the increase in net fees and commission income, foreign exchange activities and other income. The Group also recognised a €4.8 million uplift in the valuation of investment properties carried at fair value. The performance was also positively impacted by positive fair value movements of financial instruments totalling €0.86 million in relation to the APS Diversified Bond Fund, albeit this was lower than the €3.15 million recognised in 2023.

Meanwhile, the financial performance was dented by a net impairment loss of €2.96 million, which however was lower than the €3.5 million recognised in 2023. APS explained that the impairment losses in 2024 were spread over the three Expected Credit Losses stages covering mostly the local commercial book and the international syndicated loan portfolio. APS highlighted that the Non-Performing Loans ratio at the end of 2024 was 1.5%, the lowest in years and indicative of the quality of the book and strength of the Group’s credit underwriting standards.

Overall, net operating income amounted to €79.9 million compared to €82.0 million in 2023.

On the expenditure side, operating costs increased by 8.2% to €56.9 million reflecting higher employee and administrative expenses.

Overall, the APS Group reported a profit before tax of €23.8 million which is 21.4% lower than the record €30.2 million reported in 2023. After accounting for a tax charge of €5.6 million and profits attributable to non-controlling interests of €0.58 million, the net profit attributable to equity holders amounted to €17.6 million (equivalent to €0.0464 per share), which translates into a return on average shareholders’ funds of 6.2% (2023: 7.6%).

The Statement of Financial Position as at 31 December 2024 shows that total assets increased by 13.7% (or €500 million) to €4.16 billion principally composed of ‘Loans and advances to customers’ of €3.01 billion compared to €2.69 billion as at the end of 2023. The Bank also held financial investments of €393 million and ‘Cash and balances with the Central Bank of Malta’ of €380 million.

On the liabilities side, the major movement was the 17% (or €533 million) increase in customer deposits to €3.67 billion. As a result, the loans-to-deposits ratio (including syndicated loans) eased to 87% compared to 91.7% at the end of 2023.

Shareholders’ funds as at 31 December 2024 amounted to €295.7 million, which translates into a net asset value per share of €0.779. The bank’s Common Equity Tier 1 capital ratio remained unchanged at 14.6% while the Total Capital Ratio eased to 20.1% from 20.6% as at the end of 2023.

Dividend

The Directors of APS are recommending the payment of a final net dividend of €0.017 per share to shareholders as at close of trading on 4 April 2025, subject to regulatory and AGM approvals. Shareholders will have the option to receive the dividend either in cash or in new ordinary shares at an attribution price of €0.57 per share. Coupled with the net interim dividend of €0.0053 per share that was paid in September 2024, the total net dividend attributable for the 2024 financial year amounts to €0.022 per share, which represents a payout ratio of 47% (2023: 39%) and is around 7% higher than the 2023 total net dividend per share.

Outlook

APS CEO Mr Marcel Cassar stated that the ambition to grow as a Bank and Group is driven by a wish to serve consumers better. He explained that this will be done by continuing to invest in innovation.

The CEO explained that the Bank has long identified the need for scale as a priority and this led to extensive studies and detailed professional evaluation as to how this should be best pursued. He noted that European policy makers recognised that market consolidation can enhance financial stability, improve efficiency and serve consumers better. For this reason, the Group is actively pursuing strategic acquisitions to expand inorganically and capitalise on the opportunities that these can offer.