APS Bank posts record €30 million pre-tax profit in 2023

APS posts record group pre-tax profits, reversing unrealised investment portfolio losses from previous year

APS Bank plc has reported group pre-tax profits of €30.2 million (2022: €15.7 million), and €27.8 million (2022: €28.9m) for the bank.

The bank said its strong performance was underpinned by robust fundamentals and its ongoing digital transformation.

As market volatility subsided, the group also started reversing some of 2022’s unrealised investments portfolio losses, boosting performance and equity.

“As banks across Europe announce a massive profit surge, thanks mainly to the lift from rising interest rates, we note that such performances will be hard to repeat as the tailwind from interest rates subsides and central banks consider their next policy moves,” APS chief executive Marcel Cassar said.

Cassar said that due to APS’s higher pass-through of interest rate policy, the bank’s bonanza from higher interest rates had been relatively less than what other players in the market will experience.

Cassar said that despite an international backdrop loaded with geopolitical risks and economic uncertainties, the bank had a healthy business book and solid ratios for capital, liquidity, and asset quality.

APS saw interest income grow to €105.7m (32.3%) with the growth in its credit portfolio, aided by improved pricing on business loans. Net fee and commission income went up by 21% to €8.3 million.

Operating expenses grew by €5.6m to €52.6 million, mainly in human resources and a realised cost portion of share-awards granted in August 2023. Cost-to-income ratio from business operations was 61.6%, an improvement of 11.1% over 2022.

Total assets for the Group grew by 17.6% to €3.7 billion, through net loans, home financing, and cash balances with the Central Bank – which grew by a massive €45.2m to €131.1m.

Customer deposits and amounts owed to banks which in a sharply competitive interest rate environment increased by €427.2 million and €30.3 million, respectively, to €3.1 billion and €80.7 million, respectively.

Equity closed the year at €287.4 million, up by 9.9%, mainly attributable to a €20.6m profit, fair value changes on financial assets of €4.9m, and €6m retained from scrip share dividends.

The directors are recommending a final gross dividend of €0.022 per ordinary share, totalling €8.5 million.

The recommendation is to pay the dividend as scrip, giving each shareholder the option to receive the dividend in cash or through the issuance of new ordinary shares at €0.55c per share.

During 2023, APS paid an interim gross dividend of €3.2m, making this final dividend to a total gross €11.6m or €0.031 per share. Total net dividend is €7.6m (€0.02 per share).