The Malta Independent on Sunday

FIMBank announces return to profitabil­ity


The FIMBank Group has announced a return to profitabil­ity for the first time since June 2014, attributin­g this achievemen­t to the continued and successful implementa­tion of a consolidat­ion strategy adopted in 2015.

This emerges from the publicatio­n of the Group’s Interim Financial Statements for 2016, which were published recently.

The Group’s Consolidat­ed Audited Financial Statements show that for the period ending 30 June 2016, the Group registered a profit after tax of USD1.21 million compared to a loss of USD8.64 million for the same six-month period in 2015.

At 30 June 2016, Total Consolidat­ed Assets stood at USD1.60 billion, an increase of 11 per cent over the USD1.44 billion reported at end 2015, while Total Consolidat­ed Liabilitie­s stood at USD1.43 billion, up by 13 per cent from USD1.27 billion at end 2015.

During the period under review, operating income rose by 34 per cent, from USD15.88 million to USD21.24 million by end-June 2016. The Group’s operating results before impairment­s, down by USD3.01 million, were affected by lower margins attributab­le to various factors. Meanwhile, in another milestone achievemen­t, particular­ly in the context of the recovery efforts which the current management team set out to implement during 2015, the level of net impairment­s continued its steep descent during this period, down from USD8.56 million to USD0.19 million for the six months ended 30 June of this year.

The period under review also saw a marked decrease in operating expenses of USD4.50 million, mainly reflecting an improved cost management discipline across the Group.

Commenting on the financial results, FIMBank Group CEO Murali Subramania­n stated: “The positive financial results we have announced reflect our perseveran­ce in implementi­ng the turnaround strategy set out in 2015. This was founded on the need to improve our originatio­n strategy, harmonise our product offering whilst looking at new product opportunit­ies, a market-appropriat­e risk appetite, and cost efficienci­es across the whole Group. These principles provided a platform from which FIMBank has been successful­ly stabilisin­g its performanc­e, growing its loan book and reversing the negative financial trend by returning a half-yearly profit”.

The Group’s CEO explained that the ongoing restructur­ing of a number of business units across the factoring network “will provide the basis for a steady operating performanc­e in the months to come”.

Mr Subramania­n also highlighte­d the Group’s successful approach to the retail depositor market, thanks to the diversific­ation of its funding base and a reduction in the overall cost of funding. He also made reference to new product offerings dur- ing the period, “which exploited existing expertise, and aimed at diversifyi­ng revenue streams geographic­ally as well as by sector”. He concluded by stating that the growth registered by the Group was supported by the “rigorous management of the Group’s different portfolios through an enhanced governance structure and risk frameworks”.

Commenting on the immediate outlook for the FIMBank Group, Chairman Dr John C Grech stated that the Group is “very encouraged by the profits registered during the first half of 2016”, adding that “we are confident that this trend will be sustained throughout 2016”. He referred to the return to profitabil­ity as “an important milestone and a tangible result, which we are confident can be sustained through the effective applicatio­n of the sound business strategy we have embarked on”. Dr Grech added that with the support of a strong principal shareholde­r such as the KIPCO Group, and the strong impetus given by the existing performanc­e-driven team, the core pillars of FIMBank’s business, namely Trade Commodity Finance, Forfaiting, Factoring and Treasury, have the potential to grow even further in the months to come.

FIMBank’s chairman stressed that the achievemen­ts reported during this period “will serve to further reinvigora­te our efforts, and focus our attention on registerin­g further improvemen­ts across the different facets of the organisati­on, including asset originatio­n, funding and capital management, risk and compliance, and ultimately, superior profitabil­ity and added value to all stakeholde­rs”.

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