APS registers pre-tax profit of €23.8m, down by €6.4m

APS Bank plc registered a pre-tax profit of €23.8 million in 2024, down from €30.2 million the previous year, the financial results published today show.

Meanwhile, APS Bank CEO Marcel Cassar said the bank is still pursuing the acquisition of a 70% stake in HSBC Malta.

Cassar told a market briefing the acquisition was an opportunity and expressed hope that APS would be able to make an announcement soon.

APS has been in talks with HSBC Continental Europe to purchase the latter’s 70% stake in HSBC Malta.

APS CEO Marcel Cassar

“This potential acquisition is not a trophy for us but an opportunity. We will not go for it at any cost or at any price,” Cassar said in reply to questions about the acquisition.

He said the bank had been preparing internally for the acquisition for many months, engaging advisors to help it in the process. “We are ready to go to the next stage of this potential transaction,” he added.

Asked by MaltaToday whether APS Banks’s major shareholders, the Archdiocese of Malta and the Diocese of Gozo, were fully on board with the acquisition process, bank chairman Martin Scicluna said the bank could not speak on their behalf.

“The shareholders have their own voice but there is alignment on the way ahead in terms of the organisation,” Scicluna responded.

Following the financial results, directors recommended a final gross dividend of 2.6 euro cents per share for a total gross dividend for 2024 of 3.4 euro cents.

Taken together with the interim gross dividend of €3.1 million paid in September 2024, the total gross dividend distribution to shareholders for 2024 will be of €13 million. This is the highest dividend pay-out ever.

Shareholders have the option to receive the dividend in cash or as new ordinary shares at an attribution price of 57 euro cents per share.

The bank said that despite progressive improvement in performance during the second half of 2024, the bottom line “continued to lag that of 2023”. The bank attributed this to a narrowing of net interest income, competitive pressures on both asset yields and cost of funding.

“Despite the reduction in profitability these results are once again demonstrating robust operating fundamentals, underpinned by a strategy of ongoing digital transformation striving to continuously enrich the customer experience,” APS said in its market statement.

The bank, which has a 115-year history, recorded an increase in customer deposits of half-a-billion euros to reach €3.7 billion.

The bank had a loan book portfolio of €3.2 billion by the end of 2024, making it Malta’s second largest retail and commercial lender. APS boasts a 25% market share for home loans with CEO Marcel Cassar noting that the bank captured 40% of the market for new home loans issued in Malta in 2024.

APS registered a net interest income of €65.5 million in 2024, down from €73.6 million.

Interest receivable increased to €114.7 million from €105.7 million registered for 2023, in part due to growth across the retail and commercial loan portfolios.

Net fee and commission income rose by 7.3% to €8.9 million. This is a reflection of the overall business growth in the business activity of the group, particularly driven by investment services and card related transactions. The bank registered net impairment losses of €3 million for 2024.

Operating expenses last year amounted to €56.9 million, an increase of €4.3 million.

Cassar said the bank registered strong all-round growth, including a 13% increase in personal customers, 29% increase in business customers and 14% asset growth.

However, Cassar noted that despite increases in bank deposits, lending and liquidity books, this was not mirrored in corresponding growth in profits. “Growth in profits was constrained by margin pressures,” he explained, adding that the bank continued investing in digital transformation. “Millions of euros are being invested in projects that range from backbone technology to more visible, customer interfacing solutions, as well as those driven by compliance, risk management and data quality considerations,” Cassar said.

HSBC acquisition

On the HSBC acquisition process, Cassar said the bank has long identified the need to grow bigger as a priority.

HSBC Head Office (Photo: James Bianchi/MaltaToday)

Cassar said: “This led to extensive studies and detailed professional evaluation as to how this should be best pursued. We are also encouraged by the view of European policy makers that market consolidation can enhance financial stability, improve efficiency and serve consumers better - which is why we are actively pursuing strategic acquisitions, permitting us to expand inorganically and capitalise on the opportunities that these can offer.”