APS bank “owes it to its shareholders” to explore opportunities for growth, APS bank CEO Marcel Cassar said on Thursday, stopping shy of commenting on reports of the bank’s negotiations to purchase HSBC Malta.

Cassar said that the bank is “continuously analysing opportunities that may arise in our natural market."

"We believe that there is a lot of potential in the bank that is yet to be unleashed, so we owe it to our stakeholders to explore possibilities to gain scale”.

But Cassar would not comment on reports about negotiations, saying that the “as a responsible listed bank, we will inform the market through company announcements whenever there is anything to report”.

Bank profits drop to €15m

Cassar was speaking as the bank presented its financial results for the first nine months of the year, which saw the pre-tax profits dip to just under €15m from the €23.6m registered at this point last year.

The overall group’s profits were slightly higher than those of the bank, at €16.5m, although these also lagged behind last year’s €23.3m.

These numbers are “not a surprise,” Cassar said.

“We started anticipating that the high interest rate environment, coupled with the buildup of the bank’s rights issue was piling pressure on our margins and squeezing our income.”

The results also reflect the bank’s policy to pass down the European Central Bank’s interest rate cuts to its customers, Cassar added.

“The impact on our finances has been significant, but we are seeing improving margins and expect them to improve further in the last quarter of the year.”

Loans and deposits up

Despite the drop in profits, the bank said several aspects of its operations performed strongly, from the growth in its business and loan books to the increase in assets under its management.

Notably, APS CFO Ronald Mizzi said that the bank’s home loan portfolio had now grown to over €2b, just short of a quarter of the entire market. In practice, Mizzi said, this means that 45% of every new home loan throughout 2024 is being financed by APS.

The bank’s overall loan book, including home loans, grew by €226.6m to now stand at €3.1b, with commercial and syndicated loans also showing “cautious growth”.

Meanwhile, the bank’s customer deposits saw a 10% rise, some €305.3m, since the beginning of the year, now standing at €3.4b.

Nevertheless, the bank is looking to raise more capital through a new rights issue. While this was initially planned to take place at the end of this year, this will now likely take place in the first half of 2025, Cassar said.

The bank is also in the process of opening its 12th branch at Skyparks.

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