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FIMBank plc has issued its unaudited interim financial results indicating a definite strategy for growth through market and product diversification.
The Group made a profit before tax of USD3.4 million against the USD1.8 million made in the previous interim results. The Group’s income is generated from different sources. Although as a bank it succeeded in increasing its net interest income, the results on consolidation within the Group show that this revenue stream decreased drastically. The Board of Directors in their review explained that the wholly owned subsidiary, London Forfaiting Company during this period was supported by the Group through increased funding.
On the other hand the group increased its net fee and commission income as well as other revenue generating activities including doubling its forfaiting gains. As a result of the increased activities experienced by the Group, FIMBank incurred higher operating expenses which grew by 22.5%.
This is explained through additional staff costs necessitated by the new ventures undertaken throughout the period. A very positive figure is the contribution made by associated undertakings particularly, the Global Trade Finance Ltd of India where the Group has a 38.5% in equity participation. The share of profit of the associate exceeded the USD1 million mark.
FIMBank is also undertaking new operations in Latin America and the Middle East through subsidiary companies and the bank’s results reflected the costs of these new operations. The cash flow statement for the Group has registered an improved position against that of last year.
The Group’s balance sheet as at end June 2006 registered a total assets figure of USD582 million which is a substantial increase compared to the USD295 million as at the end of the last financial year. The customer account balances rose by 13% as well as other funding initiatives from promissory notes and syndicated loan facilities.
Growth was also registered from correspondent bank relationships which were nurtured in new emerging markets. The shareholders’ funds at end June amounted to USD57.7 million which is equivalent to a net asset value per share of USD0.67 cents. With a current share price hovering around the USD2 per share, and an EPS of USD0.04,2 per share, the Bank is trading at over 50 times. However, the price to book value is less than three times. As in the previous year, no dividend has been declared by the Board.
The performance review published with the company announcement, explained that the Board is optimistic that its strategy has given the desired results and there are encouraging prospects that show that the momentum achieved will continue in the second half of FIMBank’s financial year. This is good news for the investment community.
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