APS registers €10.3 million interim profit, down from 2019

After a strong start to 2020, business momentum came to a practical halt by March due to the COVID-19 pandemic resulting in both the group and the bank posting lower profits compared to 2019.

Group pre-tax profit was of €8.9 million (2019 – €15 million) while the bank delivered a pre-tax result of €10.3 million, only marginally less than €11.4 million in 2019.

“This performance is very satisfactory considering the dramatic impact of the pandemic and resultant global ripple economic effects, which wreaked havoc across financial markets,” APS Bank said.

Group performance was mostly impacted as the exposure to the APS Funds SICAV generated a net adverse correction of €0.6 million compared to gains of €3.9 million in the first half of 2019. “Considering the extent of market turmoil and prevailing global uncertainty, the downside to these asset classes has been fairly contained and it is hoped that more of the adverse performance to date can be reversed by year-end,” APS said.

At bank level, net interest income grew by 10% over the same period last year to €23.9 million. “This is a remarkable result considering that compressed interest rate conditions continued to prevail and the Bank was largely supporting its business base with moratoria and emergency financial support by the end of Q1.”

The slowdown in new credit activity and focus on support also led to a contraction in fees from processing of new facilities as from March. Plans to launch new investment and pension products were also postponed, overall resulting in fee and commission revenue remaining largely stable year-on-year, at €3.5 million (2019 – €3.5 million). Notwithstanding, bank operating income improved by 7.7% from €26.1 million in 2019 to €28.1 million in 2020.

Total group assets as at 30 June 2020 stood at €2.3 billion, a growth of €119 million or 5.5%, on 31 December 2019. Loans and debt securities were the key components of this increase, growing by 6.7% and 22.8%, respectively, over the period under review. Total deposits increased by 6.5% during the six months under review, to €2.05 billion. Consolidated Equity at 30 June 2020 was of €196.0 million (2019 – €191.9 million), while for the Bank this amounted to €185.9 million (2019 - €181.1 million).

CEO Marcel Cassar commented: “These are very positive results for both group and bank considering the extraordinary times we are living. With great dedication and commitment, we continued with our operations relentlessly, maintaining over 90% of the branch network active, upscaling our digital presence and standing by our customers.

“All along, we supported our employees and their families as they adapted to a new reality, as well as the full spectrum of business, personal and investment customers who likewise experienced uncertain and anxious times. Yet we continued to look at the future, to grow and prepare for the next levels, including the raising of additional capital later in 2020 and Business Plan 2021-2023 preparations for which are in full swing. True to our values we focused on our priorities while still posting strong results.”