‘Navigating through choppy waters, we delivered our best bank solo performance ever’ – APS Bank CEO

APS Bank plc CEO Marcel Cassar has hailed the bank’s performance for 2022, despite a number of post-pandemic shocks that the economy has experienced over the year.

This came after the publication of APS Bank’s financial results for 2022, in which it has reported €28.9 million in pre-tax profit at bank level, a sharp 21.9 per cent increase from the prior year’s €23.7 million. However, the aforementioned macroeconomic challenges brought about instability in financial markets, leading to APS Bank experiencing a drop in pre-tax profit at group level, from €24.1 million in 2021, to €15.7 million in 2022.

Total equity expanded from €221 million to €261 million at group level, and from €198 million to €257 million at bank level, primarily as a result of rising interest rates’ direct, negative impact on reserves. The Board of Directors recommended a final net dividend of €0.0174 per ordinary share, totalling €6.4 million, which is set to be paid by way of Scrip, with each shareholder having the option to receive either cash or new ordinary shares, at an attribution price of €0.57 per new ordinary share.

“What seemed like a promising start to 2022 on the back of a post-pandemic economic rebound soon came to face new shocks,” Mr Cassar commented. He remarked that the Russian invasion of Ukraine, along with amplified supply chain challenges in energy and food prices led to inflationary pressures and interventions from monetary authorities.

“Such international developments are felt also in our widely open economy, partly cushioned by Government subsidies which however contribute to a build-up in public debt. In this complex environment, Malta is experiencing higher economic growth, milder inflation, and lower unemployment than its EU counterparts, aided in no small way by a stronger than expected tourism recovery and buoyant retail and property markets,” he said.

“Navigating through these choppy waters, we again delivered excellent results and our best bank solo performance ever,” he said, before adding that the risk of recession was heightened by geopolitical tensions, prompting central banks to raise interest rates.

Mr Cassar said that APS Bank’s “resoundingly successful, record-breaking” Initial Public Offering (IPO) in June was a “long-awaited step” that it had identified as an “integral part of the plan” to grow the bank through the diversification of its shareholder base.

He also noted how in 2022, policy makers and central bankers across borders persisted in fighting inflation, “notwithstanding the implications for the capital markets and potentially, loan quality”.

“In the Eurozone alone, since July the European Central Bank (ECB) increased its deposit rate progressively to 2.5 per cent from -0.5 per cent, making it the largest and fastest increase in rates in the monetary union’s history. As banks adapt their strategies to the reality of higher interest rates, we shall manage this new scenario with the concerns of all our customers in mind,” Mr Cassar explained.

He remarked that despite the impacts that these situations have had on its investment portfolio, APS Bank remains “comfortable” that these are of “sound credit quality” and that the “slide in valuations will continue to be clawed back over the coming financial periods”.

Mr Cassar also delved into the continuation and acceleration of a number of the bank’s projects that are driving its transformation “across many areas”, ranging from smaller scale projects to upgrades of existing core technologies and implementations that are mandated by regulatory authorities or providers of payment systems infrastructures.

“The bank remained at the forefront in the use of virtual technology that now drives the new ways of working and communicating, responding to the needs of both staff and customers,” he said. This included the “further rolling out of Robotic Process Automation” in various areas of operations, along with increased use of AI, all of which “facilitate the automation of routine tasks and improve efficiency”.

“2023 has started on solid footing and we look forward to more exciting prospects for APS Group, encouraged by strong customer confidence in our model and as opportunities to gain further market share continue to unfold,” he concluded.