MeDirect ‘continued to grow’ in first half of 2024, despite difficult macro environment, says CEO

MeDirect Group (MDB Group) CEO Arnaud Denis has stated that the group’s business in Malta, Belgium and the Netherlands has continued to grow in the first half of 2024, despite persistent challenges and uncertainty at a macroeconomic level.

His comments came after MDB Group released its interim report for the first six months of 2024 (H1 2024) on Friday.

MDB Group is the parent company of MeDirect Bank (Malta) plc, a pan-European digital bank that is headquartered in Sliema. In recent years, it also expanded operations to also have a subsidiary bank in Belgium, and also launched its web and mobile platform in the Netherlands.

During the reporting period, MDB Group recorded improvements in net interest income and net fee and commission income, going up to €40.5 million and €3.4 million, respectively. Personnel expenses increased to €13.4 million, while other administrative expenses rose to €23 million. The group registered a net operating profit of it of 5.4 million, marking a seven per cent increase from that of H1 2023.

During H1 2024, MDB Group strived to de-risk its balance sheet by continuing to reduce the size of its international corporate lending (ICL) portfolio, which now stands at €300 million, net of provisions.

Net expected credit losses (ECLs) for H1 2024 amounted to a €6 million net charge (H1 2023: €5.5 million net release), primarily driven by adverse changes within MDB Group’s ICL portfolio. This was due to a deterioration in two specific exposures and losses realised due to the divestment of one additional exposure. These impacts reflected the group’s reduced risk appetite for ICL lending.

This led to MDB Group registering a pre-tax loss of €550,000, a significant drop in performance when compared to the €10.6 million pre-tax profit recorded in H1 2023.

Mr Denis noted that the first half of 2024 still represented a move in the right direction for MDB Group, as its business in Malta, Belgium, and the Netherlands “continue to grow.”

“The fact that an ever-increasing number of customers are trusting us with more of their wealth is the best evidence possible that our determined hard work, coupled with an open, innovation-focused culture, is delivering high levels of customer satisfaction, as evidenced by our Net Promoter Score of close to 50,” he continued.

Over the past year, MeDirect has grown its customer base to 143,000, an increase of 25 per cent over the past 12 months. These clients hold €5.4 billion in financial assets with the group as at the end of the reporting period, an increase of 18 per cent since H1 2023.

Total assets as at the end of the reporting period amounted to €5.1 billion, a slight increase from the €5 million recorded at the end of 2023.

Mr Denis noted that “in a macro environment which remains challenging and unpredictable, MeDirect is focused on executing its strategic plan and developing further its digital banking platform to deliver seamless customer experience and innovative financial solutions.”

“The bank is continuing to identify ways to facilitate shareholder transition, which would enable it to accelerate growth and efficiently scale its platform,” he added.