APS Bank PLC registered a pre-tax profit of €23.8 million at group level and €22.5 million at bank level as it unveiled the result for the year ending December 31, 2024.
The figures show a decline from the €30.2 million at group level and €27.8 million at bank level registered in 2023.
As anticipated early in the year, and notwithstanding a progressive improvement in performance, particularly during the second half, the bottom line continued to lag that of 2023, mainly due to a narrowing of net interest income, the bank said.
Competitive pressures on both asset yields and cost of funding prevailed, which contrasted with the fact that both sides of the balance sheet grew appreciably during 2024.
"Despite the reduction in profitability, these results are once again demonstrating robust operating fundamentals, underpinned by a strategy of ongoing digital transformation striving to continuously enrich the customer experience," APS said.
Net interest income for the year was €65.5 million (2023: €73.6 million). Interest receivable increased to €114.7 million over the €105.7 million registered for 2023, in part due to growth across the retail and commercial loan portfolios.
Interest expense increased to €49.2 million, compared to the €32.1 million registered the previous year, reflecting the MREL funding cost and the pass-through of higher interest rates to depositors.
Net fee and commission income rose by 7.3% to a total net income of €8.9 million from the €8.3 million recorded for 2023. This is a reflection of the overall business growth in the business activity of the group, particularly driven by investment services and card-related transactions.
Other income generated for the year amounted to €8.4 million, significantly higher than 2023 and mainly helped by a €4.8 million uplift in the valuation of investment properties carried at fair value.
Operating expenses for the year under review amounted to €56.9 million, up by €4.3 million on the previous year.
The group’s total assets/liabilities reached €4.2 billion at December 31, 2024, a growth of €500 million on the balance sheet of 31 December 2023.
The bank saw an increase in net loans and advances to customers and syndicated loans, which in total grew by €314.7 million.
Customer deposits dramatically up
Customer deposits grew by €532.8 million to reach €3.7 billion, mainly attributable to campaigns to attract term deposit funding across short to medium term maturities and new Kapital Plus issuances.
Countering the increase in deposits was the reduction of amounts owed to banks, down to €28.6 million from €80.7 million in December 2023.
The total gross dividend distribution for 2024 will be €13 million (total net dividend of €8.5 million).
CEO Marcel Cassar said APS Bank Group posted its strongest ever all-round growth, confirming its central role as a key player supporting Maltese businesses and households.
"But in spite of double-digit increases in our deposit, lending and liquidity books, this was not mirrored in corresponding growth in profits which were constrained by margin pressures."
Cassar said millions of euros are being invested in projects that range from backbone technology to more visible, customer interfacing solutions, as well as those driven by compliance, risk management and data quality consideration.
"Early in 2024, we made it clear that our model was not going to look at riding the interest cycle and sitting on cash, but at doing our duty as bankers which is to support our customers and the economy at large. Our ambition to grow as a bank and group is driven by a wish to expand our offering and serve consumers better, by continuing to invest in innovation, and a need to deliver greater value to our stakeholders."