APS Bank announced a record €18.4 million pre-tax profit in the financial year ended December 31, 2017, an increase of 16 per cent on 2016 as the bank registered strong growth and all-round record levels of activity.
These results were announced at a corporate presentation held at the Corinthia Palace Hotel & Spa on April 25.
In a favourable business environment characterised by exceptionally low interest rates, increasingly onerous regulatory obligations, shifting international geopolitical situations and generally improving economic conditions across Europe, with Malta being one of the best performers, APS Bank’s results underscore the soundness of its business model and the transformation that the Bank is experiencing.
Group Operating Income expanded by 22 per cent, from €34.9 million to €42.8 million, reflecting the significant business momentum which outpaced the programme of heavy investment in technology, channel transformation, strengthening of risk, compliance and governance structures and investment in human capital, which continue relentlessly. Cost-efficiency remained around the 50 per cent level despite the significantly increased activity.
Overall credit quality at bank level continued to improve, with non=performing loans to gross loans reducing from 6.4 per cent in 2016 to 4.2 per cent in 2017 despite higher net impairment provisions.
Return on equity increased to a strong 11.5 per cent (2016: 10.1 per cent).
Balance sheet growth was also robust, with total assets increasing by 16 per cent to €1.5 billion and with deposit raising and lending activity growing by 11 per cent and 27 per cent respectively over 2016. The group total capital ratio of 14.8 per cent, consisting primarily of tier 1 equity, is down from last year yet still comfortably above the regulatory minimum.
“We are continuing with the transformation at various levels, organisational, network and processes, strengthening the governance, risk and compliance infrastructure and improving the quality and diversification of the income statement, which places us in a strong position to grow and gain further market share,” APS Bank CEO Marcel Cassar said when presenting the results.
Chairman Frederick Mifsud Bonnici said: “Our differentiated, customer focused, simple and low risk business model will help us, I believe, to continue delivering to customers and shareholders and to support the communities in which we operate. With our solid foundations, a strong capital base and highly engaged and committed staff, we look forward to the future with optimism.”