FIMBank, the Malta-based global trade finance institution, has posted an after-tax profit of US$2.92mn for the six months ending June 2009. This is comparable with results for the corresponding period last year – excluding the extraordinary profit on the sale of shares in Global Trade Finance (GTF), the factoring joint venture in India, in March 2008 – which generated US$29.15mn.
The results were the subject of a meeting which was held on August 25, at the Hilton Malta.
According to a statement issued by the bank, the difficult and challenging economic conditions that characterised the last months of 2008 set the tone for the first half of 2009. As such, weakening economic cycles, financial market dislocation and lack of confidence continued to hamper liquidity and caused trade to slow down.
The group's earning per share for 2009 amounted to 2.15 US cents compared to 20.02 US cents in 2008. Both the group's net interest income and the net fee and commission income for 2009 held out at US$5.31mn (down by 25%) and US$9.15mn (down by 9%) respectively. Group net operating income for 2009 stood at US$12.99mn, compared with USD$47.30mn registered in 2008, a result which was heavily influenced by last year's disposal of shares in GTF. The group's total assets revealed a stable trend, with 2009 figures standing at US$613.18mn compared to US$624.41mn in June 2008.
Commenting on these results, FIMBank president Margrith Lutschg-Emmenegger, stated that FIMBank's strategy to focus on trade finance had truly been tested most successfully in the difficult and challenging economic conditions that characterised the last nine months. “We are proud of the fact that despite negative economic trends in our major and emerging markets, the bank was able to maintain its performance. Throughout this period, FIMBank reinforced its niche market position and further established its brand image as a trade finance specialist. Moreover, it strengthened its capital base, while its liquidity remains strong in order to continue to support trade flows globally."
The banks says its performance can be attributed to its strategic focus on trade finance, particularly in relation to the short-term financing of basic commodities, which are generally considered to be relatively immune to market fluctuations. Moreover, the combination of forfaiting, factoring and structured trade finance service diversification, as well as the FIMBank group's presence in a growing number of emerging markets, has contributed to the spreading of its risk. The bank also continued to have access to the money and capital markets throughout the period under review, both in the form of increased customer deposits as well as the highly successful subordinated bond issue in April 2009, which was oversubscribed within minutes and raised over €30mn.
As difficult market conditions persist, the bank insists that it will be maintaining its competitive advantage as a specialist trade niche market player. This will be done by keeping focus on short-term trade finance for existing clients and primary commodities, while augmenting its marketing drive to attract new customers in line with the creation of new products. The bank also intends to move into private banking, which it sees as a highly synergic product for traditional trade finance, in conjunction with a Swiss partner. Moreover, FIMBank plans to maintain high capitalisation and ratings to attract institutional funding, while recognising the need to source short-term funding. The coming months will continue to see the steady development of strategic projects with top-tier partners. The bank has announced plans for a major factoring joint venture in Russia as well as similar initiatives in India, Brazil and Lebanon.
"Although indicators of a quick return to full scale activities in the global markets remain limited, the fact that we have established strong and tested foundations for sustained growth and profitability in the years to come gives us plenty of reasons to be optimistic" says Lutschg-Emmenegger.
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