The group’s performance was heavily impacted by sharp impairments of its assets.

The Fimbank Group posted an after-tax loss of $6.98 million (€5.24m) for the six months ending June 30, compared to a profit of $4.55 million (€3.41m) registered for the same period in 2012, in spite of improvement in its operations.

The group had positive operating results from all its main companies and associated factoring undertakings. These, however, were heavily impacted by sharp impairments which significantly depressed the group’s performance.

Prior to impairment losses, marked-to-market adjustments and share of equity results, the Fimbank Group improved its operating performance by 12 per cent, from $17.17 million (€12.88m) to $19.32 million (€14.50m).

The interim results highlight liquidity ratios consistently above the required regulatory threshold. Moreover, the Basle II Capital Adequacy Ratio, at 15.04 per cent, and a Tier 1 Capital Ratio of 11.44 per cent at end of June, remained robust and comfortably above the regulatory minimums.

Fimbank chairman John Grech stated: “In the prevailing challenging operating environment, Fimbank continued developing its franchise with reputable corporate customers, focusing on providing structured commodity and trade finance solutions.

“The group followed a cautious approach towards developing new relationships, as dictated by the challenging environment and witnessed by the high level of liquidity in its assets portfolio.”

With regard to the decision concerning impaired assets, the chairman explained: “After evaluating the circumstances of each case, the board decided to take the most prudent approach, and made conservative provisions on these impaired assets. Meanwhile, legal remedies are in process for their recovery.

“Management will be actively monitoring developments concerning these assets with a view to releasing some of the provisions in the second half of 2013.”

Fimbank president Margrith Lütschg-Emmenegger said: “Fimbank continues to demonstrate a strong and diversified business model, which allows us to focus on our core business of cross-border trade finance and react quickly to developments in the markets in which we operate.”

Referring to the second half of the year, she under­­lined the fact that “as a result of the ongoing integration with the group’s new reference shareholders, the Kipco Group, we will have access to more favourable conditions on the funding side of the balance sheet, benefit from intra-group technology transfers, and leverage group synergy to drive value and generate bottom line results.”

While expressing his confidence in Fimbank’s future prospects, Dr Grech maintained that: “For the second half of the year we are expecting the group’s operating performance to remain resilient and in line with the trend achieved during the first six months of 2013.

“This should be aided by the effect of the new institutional shareholding which is expected to result in the development of new business opportunities, the realisation of strategic objectives, and overall improved visibility in the market.”