29 AUGUST 2001
First International Merchant Bank plc, listed on the Malta Stock Exchange with a current average price of USD1.26, has just published its interim financial statements, showing that the bank has generated a profit on ordinary activities, before tax, of USD1,392,144, in the six months up to the end of June.
According to general manager Ray Busuttil, "This figure is higher than that generated in the same period last year. Though we were extremely busy, during the six months under review, with our combined share offering and subsequent listing on the Malta Stock Exchange, in our operations area it was business as usual, and we continued to register gradual growth. We have not been affected by the slowdown on the Malta market, as our business is more internationally oriented. Our business contacts and relationships with banks have continued to grow."
There has been a marked increase in business related to letters of credit, in which the bank specialises. The end-of-June balances, at USD84.6 million, are substantially higher than the USD60.4 million reported at the end of the previous December. This increase of USD24.2 million is mainly due to confirmations and contingent liabilities on issued letters of credit.
The main changes to Fimbanks balance sheet are those brought about by the increase in capital, a result of the combined share offering. This caused shareholders funds to increase to USD36,782,611, which are primarily reflected in the higher level of short term money market deposits with banks. The increase in capital has also made possible USD4.6 million in loans and advances to customers. Mr Busuttil says that this increase in capital has had a "negligible" effect on income, where the interim results are concerned, because the proceeds of the share offering were only received on 26 June, just four days prior to the reporting date. No interim dividend is being proposed.
The published figures, which are in compliance with Malta Stock Exchange regulations on interim financial reporting for listed companies, and with Central Bank of Malta directives, have been extracted from unaudited management accounts, and have been drawn up according to the accounting policies used in the preparation of the banks audited financial statements for the year 2000.
The figures show that net interest income was practically at the same level; although the gross figure was seven percent higher, the actual interest paid increased by a similar amount.
Mr Busuttil explains, "We estimate that the deteriorating return on US dollar funds has reduced the interest return on shareholders funds by approximately USD225,000 over the same six-month period last year. But, on the other hand, net fee income from ordinary activities has increased by 19.5 per cent, and the ratio of net fee income to net interest return is 58.5 to 41.5 of operating income. The increase in net fee income is a clear indicator of growth."
The banks overheads, during these six months, rose by 18 per cent, mainly due to payroll increases and professional consultancy fees.
Fimbank is now gearing up towards implementation of its recently approved
five-year business plan, and has already engaged new staff to join its
team at all levels. "We are set for the next steps. We shall be
seeking strategic alliances, and shall continue to develop business
in new markets," Mr Busuttil predicts.