“APS Bank announces strong growth for first half of 2024…”

APS Group generated interest income of €56.0 million for 1H 2024, up by €6.4 million compared to the same period in 2023.

The growth in interest income was across the main credit product lines – retail, commercial and syndicated loans – as well as the liquidity holdings of cash and treasury instruments.

The Board of Directors of APS Bank plc met on 25 July 2024 and approved the Condensed Interim Financial Statements for the half year ended 30 June 2024.

The period under review continued presenting a complex and dynamic landscape with economies moving at different speeds as they emerge from the shocks of recent years. Inflation remains a concern as major central banks try to balance between controlling price pressures and supporting growth with a more benign monetary policy outlook. Concurrently, geopolitical tensions affected energy prices, global trade and general investor confidence as volatility continues in the financial markets. Malta maintained its strong trajectory helped by record tourism numbers, exports of goods and services, low unemployment and high private consumption, leading to a GDP growth forecast of 4.6% for 2024. At the same time, Government intervention to contain inflation keeps piling pressure on the national debt and deficit, which however remain generally under control.

Income Statement

For the period under review, APS Bank plc delivered a pre-tax profit of €10.1 million (1H 2023: €16.8 million) at Group level and €9.9 million (1H 2023: €16.1 million) at Bank level. As already anticipated at the stage of 1Q 2024, returns were lower when compared to the same period last year mainly due to margin compression resulting from the higher interest rate expense, including from the MREL build-up late in 2023.

1. APS Group generated interest income of €56.0 million for 1H 2024, up by €6.4 million compared to the same period in 2023. The growth in interest income was across the main credit product lines – retail, commercial and syndicated loans – as well as the liquidity holdings of cash and treasury instruments.
2. Interest expense amounted to €22.9 million up from the €12.5 million recorded for 1H 2023. This is mainly due to the higher interest paid on euro deposits reflecting the pass-through of interest rates and significantly more competitive pricing on various savings products in an increasingly tight market.
3. Net fee and commission income went up by 12.7% to €4.5 million (1H2023: €4.0 million). This increase is in sync with the growth in business activity of the Group, denoted by key commission streams related to advances, card related transactions and investment services.
4. Other operating income for the first half of 2024 is €0.9 million, or €0.4 million lower than the comparative period. The reduction is mostly due to lower Group results in the trading of financial instruments at the level of its investment in the APS Funds SICAV plc Diversified Bond Fund.
5. Net impairment losses for 1H 2024 were €2.0 million, reflecting credit charges across the three IFRS 9 stages spread over a growing local commercial book and the international syndicated lending portfolio.
6. At the same time, and quite notably, the Group closed the six months with an NPL (non-performing loans) ratio of 1.9% – the lowest in years and reflecting the strength of the Group’s credit underwriting standards.
7. Operating expenditure for the six-month period amounted to €27.0 million, up by 2.5% on 1H 2023. The marginal increase in costs is due to sustained investment in technology, regulatory and compliance requirements, professional fees and employee compensation. Cost-to-income ratio for the period under review was 70.0% (1H 2023: 62.1%).

Financial Position

h. Group assets stood at €3.77 billion, growing by 3.0% or €110.5 million. The main growth streams were:

• Net loans and advances to customers and syndicated loan portfolio which in aggregate grew by €138.4 million to €3.0 billion, with home financing once again being a main contributor;
• Countering the above increase in loans and advances, other debt and fixed income instruments contracted by €28.0 million.

i. Total liabilities closed at €3.48 billion, growing €108.0 million over the period. Key contributors to this growth were:

• Customer deposits which increased by €158.8 million. The mix was skewed in favour of term deposits, also reflecting the launch of the Kapital+ 18 in April 2024 – with overnight balances also growing on the back of further improvements to the Bank’s everyday banking proposition;
• Countering the above increase, a reduction in amounts owed to banks of €51.2 million. 

j. Total equity at the end of 1H 2024 was €289.9 million, up by €2.5 million over the December 2023 closing of €287.4 million. The main contributors were:

• The scrip dividend paid for the financial year ended 31 December 2023, with €0.7 million being retained in equity;
• The profit for the period of €6.9 million.

k. The Bank’s CET1 ratio stood at 14.1% (1H 2023: 15.8%) and the Capital Adequacy Ratio at 19.8% (1H 2023: 19.3%).

Dividend

The Board is declaring the payment of an interim net dividend of € 2,000,000 (gross dividend of € 3,076,923). The net dividend equates to €0.00527 cents per ordinary share (gross dividend of €0.00811 cents per ordinary share). This interim dividend is subject to regulatory approval. Shareholders appearing on the Register on 22 August 2024 (last trading day 20 August 2024) will be entitled to receive the dividend.

Euro surges to eight-month high as safe haven currency

The euro is likely to rise further as a safe destination due to the jittery sentiment amid the global market turmoil. The ECB’s September rate decision remains a key factor in determining the single currency’s trend.

The euro has recently surged amid global market turmoil, being viewed as a safe haven currency. The exchange rate between the euro and the US dollar spiked to 1.1 on Monday, the highest level since January, before retreating to just above 1.09 on Tuesday.

These movements reflect global sentiment: a risk-off environment boosted the euro during the stock market meltdown, while a risk-on sentiment applied downward pressure on the single currency following a market relief rally. However, the euro may face further upward pressure given the prevailing global trend. 

Euro reclaims status as safe-haven currency

Historically, the euro has been regarded as a safe place for investors’ money due to its high liquidity, status as a major reserve currency, the Eurozone’s sizable economy, and the stable policies of the European Central Bank. However, this perception of safety may have been undermined by the Ukraine war, a sluggish economic outlook, and recent political turmoil. Despite this, the Eurozone remains a crucial part of the global economy. Recently, the euro has regained its status as a safe haven amid market turmoil, spurred by a surging Japanese yen and a sharp decline in US stock markets. 

Market volatility likely to persist

Despite a broad rebound in global stock markets, volatility may persist as fundamental conditions remain unchanged. This could further support the euro as a safe-haven asset.

The euro is likely to rise further as a safe destination due to the jittery sentiment amid the global market turmoil. The ECB’s September rate decision remains a key factor in determining the single currency’s trend.

The euro has recently surged amid global market turmoil, being viewed as a safe haven currency. The exchange rate between the euro and the US dollar spiked to 1.1 on Monday, the highest level since January, before retreating to just above 1.09 on Tuesday.

These movements reflect global sentiment: a risk-off environment boosted the euro during the stock market meltdown, while a risk-on sentiment applied downward pressure on the single currency following a market relief rally. However, the euro may face further upward pressure given the prevailing global trend. 

Euro reclaims status as safe-haven currency

Historically, the euro has been regarded as a safe place for investors’ money due to its high liquidity, status as a major reserve currency, the Eurozone’s sizable economy, and the stable policies of the European Central Bank. However, this perception of safety may have been undermined by the Ukraine war, a sluggish economic outlook, and recent political turmoil. Despite this, the Eurozone remains a crucial part of the global economy. Recently, the euro has regained its status as a safe haven amid market turmoil, spurred by a surging Japanese yen and a sharp decline in US stock markets. 

Market volatility likely to persist

Despite a broad rebound in global stock markets, volatility may persist as fundamental conditions remain unchanged. This could further support the euro as a safe-haven asset.

Malta Company Announcements:

Exalco Finance p.l.c

The Board of Directors of Exalco Finance p.l.c. (the “Company”) is scheduled to meet on 9 August, 2024 for the purpose of considering and, if thought fit, approving, the unaudited interim financial statements of the Company for the six month period ended 30 June 2024.

Calamatta Cuschieri Moneybase p.l.c

The Company announces that the Directors are scheduled to meet on Monday the 26th of August, 2024 to consider, and if thought fit, approve the Consolidated Interim Unaudited Financial Statements of the Group for the six months ended 30th June, 2024.

VBL p.l.c

This is a Company Announcement made by the Company in compliance with the Capital Markets Rules. The Board of Directors of VBL p.l.c. is scheduled to meet on the 21 August 2024 in order to consider and, if appropriate, approve the Company’s interim accounts for the half-year period ended 30th June 2024.

‘Disclaimer: The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Similarly, any views or opinions expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the particular circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Timberland Finance has not verified and consequently neither warrants the accuracy nor the veracity of any information, views, or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. All investments carry risks. Your investments may go up as they may go down, including the possible loss of capital. Past performance is not indicative of future results. Timberland Finance does not accept liability for losses suffered by persons as a result of information, views, or opinions appearing on this website. This website is owned and operated by Timberland Invest Ltd. Timberland Invest Ltd. is licensed to conduct investment services business under the Investments Services Act by the MFSA and is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act. ’