Izola Bank grows revenue streams amid pandemic

During the year ended 31 December 2020, despite the pandemic, Iżola Bank managed to generate growth in its revenue streams, growing its interest income by 4% over 2019 levels

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During the year ended 31 December 2020, despite the pandemic, Iżola Bank managed to generate growth in its revenue streams, growing its interest income by 4% over 2019 levels.

This growth was significantly below projected levels which resulted in the Bank holding excess liquidity, built over the last months of 2019, with the consequence that interest expense increased by 26%. Compared to the previous year, net interest income decreased by €621,627 (10%).

This decrease coupled with the increase in related Depositor Compensation Scheme contributions resulted in a profit before tax for the year of €604,891; a decrease of 76% on 2019. Profit after tax was 385,220, down 74% compared to the previous year.

Against this background and whilst containing spend on recurrent expenditure, the Bank continued investing in staff complement and key ancillary support services, all geared towards positioning the Bank for its next growth phase.

The bank’s Cost-to-Income ratio increased to 86.9% (2019: 61.4%) which is primarily the result of the impact of the Depositor Compensation Scheme contribution; a contribution supporting the 2019 levels of covered deposits and therefore a non-recurrent item. Adjusted for this contribution, the cost-to-income ratio would be 68.5%, which is very much in line with the industry norm.

The total assets of the Bank increased by 5.7% to €389,296,940, mainly driven by increases in the loan and treasury portfolios. Factored receivables, a key component of the Bank’s business, declined marginally by 6%.

This was mostly expected as the factoring business depends mostly on the purchasing of receivables from customers, which is in turn directly related to economic activity.

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