APS Bank delivers best-ever half-yearly results, to pay interim dividend

APS Bank plc delivered €16.8 million in pre-tax profit in the first six months of 2023, up from €1.9 million in the same period in 2022


APS Bank plc delivered a pre-tax profit of €16.8 million (1H2022: €1.9 million) at Group level, and €16.1 million (1H2022: €13.6 million) at Bank level for the period ended 30 June 2023.

The Group generated gross interest revenue of €49.6 million during the same period attributable to a mix of growth across the Bank’s credit portfolio and higher interest returns across most asset classes.

The Board of Directors of APS Bank plc met on Thursday and approved the Condensed Interim Financial Statements, reviewed by Deloitte Audit Malta.

In the first half of 2023, conditions for the world economy to move towards a soft landing receded amid stubbornly high inflation and financial sector turmoil. Policymakers also took forceful actions to stabilize financial systems and avoid that the Silicon Valley Bank and Credit Suisse episodes lead to contagion. 

In this environment, APS Bank delivered its best-ever results for an interim financial year for both Group and Bank, thanks to a business strategy that navigated through persistent economic challenges and uncertainties. Further supporting the Group’s actions was a calming of financial markets from last year’s instability as sentiment generally improved.

APS Bank's interest expense amounted to €12.5 million, increasing by €5.6 million over 1H2022 as local deposits and non-EUR fund-raising repriced higher in line with rising interest rates.

Net fee and commission income went up by 4.7% to €4.0 million from increased commission income on advances, card related transactions, investments and general transaction banking.

Other operating income amounted to €1.3 million, recovering from last year’s negative result of €6.6 million. Fair value changes on financial instruments contributed to this with a net gain of €0.8 million against a loss of €8.2 million of last year.

Compared to the severe market turbulence that negatively impacted portfolio valuations in 2022, the period under review saw some of the unrealised losses coming back, with anticipation that this trend may continue in coming financial periods.

A net impairment writeback of €0.1 million compares with the €0.1 million charge posted in 1H2022. This was largely due to the improved performance of previously-classified stage 3 loans, resulting in a lower ECL charge, attesting to the Bank’s prudent credit underwriting standards and risk appetite.

Operating expenses increased by 14.5% to €26.3 million mainly due to staff costs and expenditure on new technologies, regulatory and compliance requirements, security, insurance and general inflationary rises. Cost-to-income ratio from business operations for the period improved to 63.3% as the Bank continues to monitor and search for efficiency opportunities without compromising quality or the customer experience.

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