APS Group 2021 pre-tax profit up 52.5% from 2020 to €24.1 million

APS Group registered a pre-tax profit of €24.1 million in 2021, an increase of 52.5% over the €15.8 million registered in 2020. The Bank posted a record pre-tax profit of €23.7 million (€15.5 million in 2020).

The Board of Directors of APS Bank plc met on 10 March 2022 and approved the Group Annual Report and Audited Financial Statements for the year ended 31 December 2021.

Net interest income grew by 13.3% to €55.4 million, driven mainly by the continued growth in the Bank’s lending book. Interest receivable on loans and advances increased by €6.8 million to €63.2 million. Interest expense remained at 2020 levels despite the significant growth in customer deposits, demonstrating the Group’s efficient asset-liability and funding management in the face of compressed interest margins.

Net fee and commission income totalled €7.0 million, an increase of 34.3% or €1.8 million higher than last year. This growth results from an expanded customer base and increased services, in particular the provision of credit, general banking and investment services, including from the pension products offering launched in late 2020.

Other operating income for the year was €0.8 million, down €0.3 million on 2020.

Operating expenses increased by 21.0% to €40.6 million, raising the cost to income ratio to 64.3%. The key drivers for the increase are the continuous investment in human capital to sustain operational growth and strengthen risk and compliance management, and various projects which are in motion, not least in the technology, aimed at improving the customer experience and the Group`s position within the industry.

Impairment against expected credit losses for the year amounted to a writeback of €1.5 million compared with a net charge of €5.5 million in 2020. The Group continuously assesses information and client performance especially in relation to the impact of COVID-19 on the credit portfolio, and the net write-back on credit loss estimates made in 2020 reflects the quality of the book, risk appetite in market circumstances that remain challenging and a vigilant approach to credit underwriting standards.

Financial Position

Group total assets at 31 December 2021 expanded by a further €374.0 million, or 15.4% reaching €2.8 billion. Lending activity grew by 14.7% to reach €2.1 billion.

The demand for home loans steered this expansion by largely contributing to this increase, followed by commercial lending. The syndicated loans portfolio also grew by 18.7% to €134.3 million. In terms of liquidity management, a further €99.4 million in liquidity balances were placed with the Central Bank of Malta.

Funding grew by 16.2% to reach €2.6 billion, resulting from increases in both customer deposits and amounts owed to banks. The year closed with Group equity of €220.8 million, an increase of €14.6 million compared to prior year. The Group’s CET1 ratio stood at 13.0% (2020: 14.4%) and the Capital Adequacy Ratio at 16.9% (2020: 18.8%) – both ratios are being managed in line with regulatory thresholds including buffers.

The directors recommended that a gross dividend of 1.85 cents per ordinary share (net dividend of 1.20 cents per ordinary share) be paid to ordinary shareholders. The total gross dividend to be paid is €4,615,385 (total net dividend of €3,000,000).

This dividend recommendation, which is subject to the final authorisation of the MFSA, will be presented for the approval of shareholders at the annual general meeting.