APS Bank plc - Quarterly Update

On 24 April 2025, APS Bank plc published a Quarterly Financial Update providing information about its performance in Q1 2025 when compared to the same period in 2024.

Net interest income remained practically unchanged at €16.7 million as the increase in gross interest income (+€1.4 million to €29.6 million) was offset by higher interest expenses (+€1.4 million to €12.9 million). Nonetheless, net interest income improved by 1.7% from Q4 2024 amid lower interest expenses.

APS registered a decrease of 10.6% in non-interest income to €2.3 million as the foreign exchange losses and negative fair value movements in relation to the consolidation of the APS Diversified Bond Fund outweighed the higher net fee and commission income.

APS also recorded a net impairment loss of €0.3 million, which however was lower than the €1.26 million charge in the corresponding period last year. The bank explained that the charges mainly relate to exposures within the local commercial loan book and international syndicated lending portfolio.

Total operating costs increased by 18.1% to €15.9 million driven by higher depositor compensation scheme costs and non-recurring expenses of €1.1 million directly attributable to the Bank’s bid for HSBC Bank Malta plc. APS stated that these advisory and due diligence fees are expected to taper off since APS announced its withdrawal from the process.

Overall, the APS Group reported a quarterly profit before tax of €2.88 million (Q1 2024: €5.03 million) and a net profit for the period of €1.45 million (Q1 2024: €3.45 million).

The Statement of Financial Position as at 31 March 2025, when compared to the position as at the end of 2024, shows that total assets increased by 1.6% to €4.23 billion. Customer loans, including syndicated loans, grew by 1.7% to €3.25 billion while cash with the Central Bank of Malta increased by 10.7% to €420 million.

Total liabilities also grew by 1.7% to €3.92 billion largely driven by a 2.4% increase in customer deposits to €3.76 billion. As a result, the loan-to-deposit ratio remained relatively unchanged at 86%.

Shareholders’ funds increased by 0.5% to €297 million, which translates into a net asset value per share of €0.783 (31 December 2024: €0.779). The Bank’s CET 1 ratio eased to 14.1% (31 December 2024: 14.6%) and the Capital Adequacy Ratio moved marginally lower to 19.5% (31 December 2024: 20.1%).

Commenting on the Q1 2024 performance, APS Bank CEO explained that the Bank continues to deliver a strong performance marked by steady, all-round growth, gaining market share while offering a comprehensive suite of services. He noted that the trend of declining interest rates is favourable since the net interest margin is anticipated to continue widening.

The CEO explained that although APS exited the bidding process for HSBC Bank Malta plc, the Group is actively looking at new strategic opportunities. Meanwhile, APS is considering a capital increase later in the year.