Last Updated on Wednesday, 29 March, 2023 at 11:38 am by Andre Camilleri
MeDirect Group, announced a profit after tax of €8.7 million in 2022. These results were achieved during a year in which the Group made significant progress in executing its business transformation plan, including by further investing in technology and developing its Wealth SuperApp for retail customers in Malta and Belgium, expanding its mortgage offering and continuing to transform MeDirect’s balance sheet. In 2022, MeDirect grew its retail customer base to 108,000, holding €4.2 billion of client financial assets, of which €1.4 billion were investments held in custody with MeDirect. Despite the challenging capital markets environment, MeDirect achieved wealth product penetration of 37% of its retail depositor base, with wealth customers holding an average of €58,000 in financial assets with MeDirect. MeDirect continues to operate with solid capital and liquidity ratios which exceed all regulatory requirements and recommendations.
During 2023, MeDirect aims to offer more innovative solutions to democratise investing while expanding into its third European market, the Netherlands. In investment services, MeDirect will scale its MeManaged service, launched at the end of 2022, which offers clients access to a fully digital and highly accessible discretionary management service, managed by MeDirect, in partnership with BlackRock. New products are planned for 2023 that will further guide and support clients in their investment journeys. MeDirect will also offer virtual and physical cards, giving clients greater ability to use MeDirect for their daily needs. Additionally, MeDirect plans to leverage its cutting-edge tech capabilities by offering its platform on a software-as-a-service basis to financial institutions looking to launch or expand their digital wealth capabilities.
Arnaud Denis, Chief Executive Officer of MeDirect, discussed the bank’s performance and strategy, stating that: “Throughout the year, MeDirect remained focused on its purpose: to empower customers to grow their wealth with confidence and autonomy.” Denis added, “I would like to thank all our customers for their trust and our teams for their dedication to ensuring we deliver on this purpose. Our 2022 profit will strengthen our capital base in a challenging market environment, leaving MeDirect well placed to push forward with more exciting developments in 2023.”
As noted in its 2022 annual report, MeDirect’s strategic roadmap is based on four pillars:
- Building the WealthTech platform,
- Growing the retail franchise,
- Derisking and diversifying the balance sheet, and
- Strengthening the operating model.
MeDirect’s efforts to establish itself as a pan-European WealthTech leader were given a significant boost by the deployment of its Wealth SuperApp in both Malta and Belgium. The App provides customers, in one place, very convenient daily banking capabilities as well as a broad range of online investment solutions, with easy access to more than 5,000 financial investments, including approximately 1,750 mutual funds, 480 ETFs, 250 bonds and 3,000 equities, trading on 17 stock exchanges around the world.
MeDirect continues to maintain high levels of customer satisfaction, as evidenced by the fact that 90% of MeDirect customers who held an account five years ago continue to be customers today. In Belgium, MeDirect was rated third amongst Belgian banks for investment products by Spaargids.be.
In 2022, MeDirect continued to de-risk and diversify by growing its mortgage portfolio to €2 billion, of which €1.8 billion are Dutch NHG (government guaranteed) mortgages and reducing its international corporate lending portfolio to €512 million, representing less than 11% of the total balance sheet as at the end of 2022. The mortgage portfolio is hedged against interest rate risk and is financed in part through MeDirect’s Bastion mortgage securitisation programme. In partnership with Allianz Benelux S.A./N.V., MeDirect built its platform to originate Belgian mortgages, with €132 million of Belgian mortgages held on balance sheet at year end. In late 2022, MeDirect also launched a professional buy-to-let product in the Netherlands, in partnership with Build Finance, a Dutch buy-to-let specialist firm. In Malta, MeDirect has used innovative technology to set new standards in the Maltese mortgage market in relation to time-to-quote and time-to-approval. By year-end 2022, MeDirect had originated €68 million of Maltese mortgages. MeDirect also continued to grow its successful Maltese corporate lending and banking services businesses.
MeDirect strengthened its operating model by building its proprietary tech capabilities and improving efficiency. As one of its core competitive advantages, MeDirect owns the intellectual property of critical elements of its value proposition. To date, over 28 million lines of code have been deployed. Notwithstanding significant investments in technology and product development, MeDirect has been able to maintain its fixed cost base almost flat from 2021. It has also opened a tech hub in Turkey to complement its core team of developers in Malta.
Mr. Denis said: “MeDirect has been deeply transformed over the past three years, combining the DNA of a tech company and a bank, focusing on delivering innovation and high quality of service in a reliable and safe manner. This is reflected in our successful WealthTech platform, offering innovative solutions that are easily understood and accessible by all. It also comes through in the effort we put in to give our employees the best possible working environment and career development opportunities. Finally, we focus on ensuring we operate responsibly with the highest environmental, social and governance standards.”
MeDirect’s commitment to ESG was reflected in MeDirect’s Non-Financial Statement, published together with its Annual Report and Financial Statements. The statement details the ESG Strategy which has been adopted by the Group, the progress achieved in 2022 and the various targets which MeDirect has put in place to ensure that it meets, amongst other objectives, the requirements set out in the Paris Climate Agreement.