The Fimbank Group registered an after-tax loss of $45.23 million in 2014. Photo: Vanessa MacdonaldThe Fimbank Group’s positive operating results were completely wiped out by bad debts of $51 million, emanating particularly from associated companies in India and Russia, but also from its own performance.
In fact, the Fimbank board has agreed to discontinue investments such as the one in FactorRus (of Russia), saying these would no longer form part of the group’s investment strategy.
The 20-year-old group registered an after-tax loss of $45.23 million, compared to a loss of $4.22 million in 2013.
The loss eclipses considerable growth in the balance sheet, with consolidated assets as at December 31, 2014, standing at $1.41 billion, an increase of 14 per cent over 2013.
The group reported that 2014 created significant challenges for some of the group’s international business, with a “combination of economic issues, adverse market conditions and credit defaults leaving their mark”.
“Consequently, Fimbank experienced significant impairment events across various group entities, making the year one of the most challenging in its existence,” acting CEO Simon Lay said.
Fimbank experienced significant impairment events acrossvarious groupentities, making theyear one of themost challengingin its existence
Group liquidity has remained strong, while capital adequacy remained significantly above the minimum regulatory requirements.
Looking ahead, Mr Lay said the group had a robust global trade finance platform which places it in a strong position to capture a good share of a large global trade finance market.
“Resources will be deployed in a controlled manner towards key business sectors which offer profit potential. I am committed to leading this organisation towards a performance-driven culture,” he said.
“For 2015 and beyond we will be focusing our energies on strengthening further our business model, including our approach to governance, risk structures and internal control capabilities, as well as deploying the appropriate resources to maximise recoveries.
“While the group previously invested heavily in the development of our global footprint, we will now be consolidating these investments in order to focus on profitability and generate returns for our shareholders.”
The Fimbank board did not recommend a cash dividend.
However, subject to future regulatory approval, the board will be recommending a one-for-10 bonus issue of ordinary shares by way of capitalisation of the share premium account.