BNF Bank achieved solid positive financial results in the first half of 2022, it said in a statement.
The bank’s lending book grew by €52.3m and improved in credit quality, with non-performing exposure decreasing by €10.5m. The drop in non-performing exposure was due to the cure of a non-performing commercial loan and the recovery of other non-performing loans, the bank said.
Lending book growth was primarily funded by deposits from customers which grew by €96.6m in the first half of the year.
Building on the current trajectory
The bank’s capital adequacy ratio as at June 2022 was 17.2 per cent compared to 17.5 per cent in December 2021.
During H1 2022, as part of its capital plan, the bank obtained authorisation from the Malta Financial Services Authority to issue unsecured subordinate bonds of €15m with an over-allotment option of €5m. In July, the bonds were issued and fully subscribed one week in advance of its closing date at €20m. The bonds meet the criteria to qualify as Tier 2 capital and will increase the Capital Adequacy Ratio further in the second half of the year.
Net interest income remained the main driver of the bank’s profitability and has increased by 15 per cent to €12.6m in the first half of 2022. The increase in net interest income pertained mainly to lending book growth.
Operating costs amounted to €9.2m for H1 2022, capped to €8.1m for the first half of 2021, with most of the increase being a cash contribution payable to the Depositors Compensation Scheme upon LN 193 of 2022 coming into force. Adjusting for the latter, the bank’s cost-to-income ratio would have improved due to positive jaws being generated between operating income and operating expenses.
Chief financial officer Mark Micallef said: “With our annual targets and objectives for our Vision 2023 strategy firmly in sight, we are focused on driving our growth plans to ensure continued competitiveness and excellence in customer service. This is at the heart of why and how we create value responsibly for all our stakeholders.”
Michael Collis, the bank’s CEO and managing director, added: “Mindful of the current global uncertainty and instability, we are convinced that our unique proposition, our strong brand portfolio, the agility of our teams and our financial strength will enable us to pursue our profitable and sustainable growth strategy. We remain optimistic about the outlook for BNF Bank and are confident in our ability to achieve another year of growth."