The Fimbank Group has announced an after-tax profit of $6.1 million for the first six months of 2018, an increase of 47 per cent on the $4.1 million registered during the same period in 2017. These figures emerged from the publication of the group’s interim financial statements for 2018, which were approved at a meeting of its board of directors on August 14.
During the period under review, net operating results, that is, operating revenues less operating costs, more than tripled, from $2.7 million to $9.8 million, as the group improved its revenues by $4.4 million and reduced its costs by $2.7 million.
This was a contribution of many factors, including increased volumes and better yields on its product offering, reduced cost of funds as the group was more selective in its funding sources, and successful implementation of measures in managing costs.
Following the successful completion of the $105 million rights issue concluded in May 2018, the group’s equity at June 30 stood at $274 million, with the CET1 ratio at 16.7 per cent. At the end of the reporting period, total consolidated assets stood at $1.95 billion, an increase of 19 per cent over the $1.64 billion reported at end-2017, while total consolidated liabilities stood at $1.67 billion, or 14 per cent more than the $1.47 billion reported at end 2017.
Commenting on the financial results, Fimbank Group CEO Murali Subramanian said: “The results for the first six months of 2018 are a manifestation of Fimbank’s performing fundamentals and its realisation of a sustainable platform for further success. The group has been successful in turning its business around, generating profitability and providing a platform for growth over the last 12 quarters.”
Mr Subramanian also highlighted the strong improvement in the group’s core performance, explaining that this has occurred across the key operational pillars, covering business and revenue generation, risk management and expense management.
“Notwithstanding the economic situation around the world, the group’s origination efforts have been stepped up, growing client assets and demonstrating a strong pipeline of business across the different products and geographies within which it operates. As a result, core income generation has rebounded on the back of increased volumes, improved yields, and lower cost of funds.”
Mr Subramanian also attributed the group’s positive half-yearly results to successful measures in managing costs, and to improving key cost/income ratios both in absolute and relative terms.
“As much as origination and business development remain a priority for the group, the focus on asset quality and acceptable risk levels has remained critically important, resulting in improved provision coverage on delinquent loans, with recovery efforts continuing to yield expected results.”
Fimbank Group chairman John C. Grech expressed the satisfaction of the board with the results of the first half of 2018.
“Fimbank’s positive performance, which has now extended into its third year, has a very specific provenance. It is the direct consequence of a strategic shift in focus successfully tuned to changing market conditions,” he said.
“Accomplished with extremely sound planning and copious amounts of hard work and perseverance by our strong management team, ably led by Mr Subramanian, this successful drive has contributed to establishing the Fimbank Group as a more robust banking institution, based on business discipline, centrally-aligned operations, and effective management of enterprise risks.”
Meanwhile, Fimbank’s board of directors will not be recommending an interim dividend for the period under review.