The Fimbank Group has announced a pre-tax profit of $9.6 million for the first six months of 2019, an increase of 38 per cent on the $7 million registered during the same period in 2018. These figures emerge from the publication of the group’s Interim Financial Statements for 2019, which were approved at a meeting of its board of directors on August 8.
At June 30, total consolidated assets stood at $1.77 billion, down by five per cent when compared to the $1.87 billion reported at end-2018. Total consolidated liabilities stood at $1.48 billion, or seven per cent less than the $1.59 billion reported at end-2018.
On the other hand, deposits from corporate and retail clients increased by $65 million.
During the period under review, the group’s net operating income saw a marginal decrease of two per cent, from $28.3 million to $27.8 million. Net interest income increased by 19 per cent to $16 million, as improvements in the liability structure of the group offset the reduction in interest income resulting from lower asset levels.
Due to the group maintaining adequate coverage on non-performing exposures identified in 2018, net impairment charges for the first six months of 2019 amounted to $0.6 million, compared to the $2.1 million charged in 2018. In the current year, net impairments are inclusive of the successful recovery of a fully provided exposure, amounting to $3 million.
Commenting on the financial results, Fimbank Group CEO Murali Subramanian stated that the strong performance registered during the first half of 2019 was a further reflection of Fimbank’s risk-balanced business model transformation. He explained that the group has “successfully completed a de-risking exercise of its main portfolios, aimed at strengthening its varied exposures across the different products and geographical presences, thereby reducing concentrations, and ensuring sustained growth in the years to come. This has led to a short-term reduction in the size of the balance sheet, as key portfolios have readjusted their client and market profile, refining structuring and increasing risk mitigation.”
Fimbank Group chairman John Grech expressed the satisfaction of the board with the results of the first half of 2019. He stated that Fimbank’s positive performance, which has now extended into its fourth year, comes in the context of a “critically important transformation of the underlying portfolios of the group during this period, the result of which places Fimbank in a position of strength, as it makes its business model fundamentals even more attractive”.
Grech commented that Fimbank’s expertise in structuring transactions across the trade-related product portfolio, together with the ability of its people to pursue and maintain the building of business partnerships with the bank’s diverse client base, remained key to Fimbank’s reputation.
The Fimbank chairman stated that while the return to asset growth would be a priority going forward, “we will remain vigilant on risk, controls and governance in order to ensure that the expansion of the business is executed in a sustainable way”.
He explained that Fimbank “has sufficient business pipeline, funding and resource structures in place to support this path. Under the leadership of CEO Subramanian and his management team, with the right mix of talent and focus on client delivery, and operating within a risk-balanced approach, we are confident of Fimbank’s ability to generate higher value and returns for the benefit of all stakeholders”.
Meanwhile, Fimbank’s board of directors will not be recommending an interim dividend for the period under review.
For more information about Fimbank plc, visit www.fimbank.com.