APS Bank’s pretax profit grew by 8.6% to €11.4m by the end of the first half of the year, as compared to €10.5m at the end of 2018, extracts from the unaudited accounts of the bank reveal, according to a press statement by the bank.
The bank says that consolidated results additionally reflect the positive fair value movement in the APS diversified bond fund during the period under review pushing group pretax profit to €14.9m compared to €9.3m in 2018.
Net interest income grew by 14.4% while net non-interest income — in the main part, Fees and Commissions — increased by 11.9%, according to extracts from the unaudited accounts of the bank for the six months ended 30 June. As a result, Operating Income grew by 13.9%, from €22.9m in 2018 to €26.1m in 2019.
Despite continuing cost pressures arising from investment in personnel and other operating expenses, including risk and compliance, technology, security and process transformation, always in support of the orderly business growth, cost-efficiency was maintained around the 53% level, the press statement adds.
APS says that balance sheet activity remains the main driver behind the growth, as deposit raising and lending grew by 5.5% and 8.6%, to €1.74b and €1.45b respectively, since 31 December 2018.
On the one hand, high liquidity permits liquidity coverage (LCR) and net stable funding (NSFR) ratios to be maintained well above the regulatory minima. On the other hand, surplus liquidity creates challenges as a low or negative interest rate environment persists, the press statement adds.
While the bank remains buoyant about its growth prospects in line with its 2019-2021 business plan, funding strategies may need to be adjusted to optimise spread management.
Late in May the Bank received €13m of new CET1 equity at the conclusion of a rights issue which, as announced and on top of retained earnings from 2018, marked the conclusion of Phase 1 of its Capital Development Plan. This injection not only supports the capital adequacy of APS Bank but provides a platform for its future progress, the bank believes. The CET 1 Capital ratio as at the end of June stood at 14%, well above the statutory minimum. Key performance ratios for NPLs and profitability (adjusted ROAE) remained strong, at 3.1% and 10%, respectively, the bank press statement adds.
“APS Bank is continuing with its plans of scaling up around a core business model that looks at selective growth and diversification of both its funding and credit base. At the same time, we continue to strengthen governance, risk controls and technology to enrich the customer experience in a safe and prudent way. Our gradual gain in market share also continues in a business environment that remains competitive and challenging,” said Marcel Cassar, CEO of APS Bank.