A focus on the bottom line, a reduction in the cost-income ratio, optimising available liquidity and increasing liquidity from the market and from clients are Fimbank’s immediate objectives this financial year, new chairman John C. Grech told The Sunday Times.
Approach to new trade finance business remains selective
Dr Grech’s appointment was announced at the Malta-headquartered trade finance bank’s annual general meeting in mid-May. He succeeds Najeeb Al Saleh, who had occupied the post since 1997 to lead a team with president Margrith Lütschg-Emmenegger, who is now also vice-chairman.
He explains that the new board of directors includes younger members and professionals with investment banking experience, “an asset in view of current developments leading to the potential entry of a controlling interest in the bank”.
In March, Fimbank issued a company announcement on the stock exchange to inform the market of a proposed transfer of Massaleh Investment KCC’s 38.8 per cent to a new investor, Burgan Bank of Kuwait.
Burgan Bank plans to increase the holding to more than 50 per cent of Fimbank’s share capital through the injection of new equity. Dr Grech would only say that the due diligence process is currently moving ahead steadily.
Ms Lütschg-Emmenegger has seen Fimbank’s balance sheet rise 500 per cent from $176 million (€139m) when she joined in 2003 as executive vice-president. Total consolidated assets as at December 31, 2011, exceeded $1 billion (€791m), a milestone which means the bank is armed with critical mass in dealings with partners in the market.
“Dr Grech’s appointment comes at an important juncture for Fimbank,” Ms Lütschg-Emmenegger added. “I have seen Fimbank develop in leaps and bounds. Our immediate objectives are to continue to help our customers respond to the market conditions. Our stature as a global player in trade finance requires that we are dynamic in our approach to creating new products, ideas and structures, while maintaining efficient support for traditional products.”
Fimbank’s business model has proven its resilience in the challenging environment of the past few years. Dr Grech said the bank’s over-riding objective this year will be to pursue its disciplined approach to drive performance improvement.
The strategy involves an even stronger focus on satisfying customers’ needs, while managing risk, increasing productivity and cost improvement, and empowering its employees further. Fimbank’s efficient size and the reach of its global network are its best advantage in generating new business as the bank is able to respond rapidly to current world conditions.
In its 17 years of operations, Maltese investors have consistently demonstrated their trust in Fimbank, most recently as despositors.
Ms Lütschg-Emmenegger said the “encouraging” response to its savings and term-deposit products has driven the bank to continue to enhance the product portfolio.
New functionalities are soon to be added to Easisave, the online savings product, and there are plans for its introduction in markets outside Malta.
Dr Grech believes trade finance has definite growth prospects, particularly in countries experiencing steady growth where Fimbank is present under its strategy to specialise in emerging markets. Opportunities beckon for the bank in Libya but the time is not yet right.
Ms Lütschg-Emmenegger adds, “You need three things: Understanding the market, expertise and agility; and you need to establish a foothold in international markets to succeed and grow.
“The group is now present in 10 international financial centres. We will continue to monitor the market in Libya very closely. It is a long and little travelled road for the Libyan people to full democracy.
“Fimbank is ready to be a facilitator between this emerging country and developed markets once a stable environment is achieved. In the meantime, we will continue to provide training to the Libyan banking industry.”
Fimbank is keeping a watchful eye on the situation across the North African region: its Egypt Factors joint venture is heavily dependent on normality returning to this promising market. The group’s other ventures in the United Arab Emirates, Russia and Brazil are showing steady growth, and with its seven operating branches, India Factoring is showing significant potential.
In the long-term, Fimbank plans to expand its footprint further. Ms Lütschg-Emmenegger said markets in the Far East, Africa, the Middle East and Latin America still have huge growth potential for factoring and receivable finance which the bank is keen to explore.
London Forfaiting, meanwhile, remains an important driver of the group’s performance with significant prospects for business.
“Structured commodity financing in developing or emerging markets is becoming more important to us, given the market conditions,” the vice-chairman added. “However, our approach to new trade finance business remains selective and focused on developing safe transaction structures with established corporate clients.”