The Board of Directors of APS Bank plc met on 31 July 2025 and approved the attached Condensed Interim Financial Statements for the period ended 30 June 2025. 

Against a backdrop of ongoing global adjustment, with elevated geopolitical tensions, new trade tariffs threatening supply chains, persisting financial markets uncertainty and other disruptions causing economies to move at different speeds, the Maltese economy remained fairly resilient and continued a solid growth path. The Bank’s results for the period under review confirm the turnaround in operating revenues and profitability in the second quarter already anticipated when the 1Q 2025 numbers were reported, which performance is expected to strengthen further in the second half of the year. 

Financial Performance

For the period under review, APS Bank plc delivered a pre-tax profit of €9.1 million (1H 2024: €10.1 million) at Group level and €10.2 million (1H 2024: €9.9 million) at Bank level. Net operating income grew by a healthy 10.6% relative to the first half of 2024, but this was offset by material one-off costs, including higher contributions to the Depositor Compensation Scheme and fees related to the advisory and due-diligence work in connection with the exercise to acquire HSBC Bank Malta plc.

a) APS Group reported an interest income of €60.1 million for 1H 2025, an increase of €4.1 million (7.3%) on 1H 2024. Interest income growth was primarily propelled by the Group’s core retail and commercial lending portfolios. Although there was a notable decline in interest income from syndicated loans compared to the previous year, this was more than offset by an increase in interest income from loans and advances, driven by growth in both retail, commercial and inter-bank lending.  

b) Interest payable amounted to €24.5 million for the six months ended 30 June 2025, up by 7.0% on the €22.9 million of the corresponding period in 2024. The increase is consistent with the year-on-year growth in customer balances and reflects the expanding customer base and a commitment to offer competitive rates in a dynamic market environment. Importantly, funding costs have been decreasing thanks to a realignment in pricing and in favour of overnight and demand deposits.

c) The Bank’s interest pricing is resulting in a strengthening of the Net Interest Margin (NIM), becoming more in evidence during 2Q 2025 compared to prior periods. This trend is supported by higher net fee and commission income which grew by 2.9% to €4.6 million (1H 2024: €4.5 million), in line with the Group`s broader upward trend and mainly driven by income from advances, card and other transaction banking. 

d) Other operating income of €0.5 million decreased by €0.3 million compared to 1H 2024. At Bank level, a strategic partial divestment of shares in a sub-fund generated a gain of €0.7 million during the first six months, partly offset at Group level by adverse foreign exchange movements, reflecting broader market volatility.

e) Net impairment losses for 1H 2025 totalled €0.5 million (1H 2024: €2.0 million), marking a significant reduction compared to the prior year which had recorded credit charges on the commercial and syndicated loan portfolios (not repeated in the current reporting period). This performance attests to the sustained credit quality and underwriting standards of the Group’s lending portfolio, also resulting in a Non-Performing Loans (NPL) ratio of 1.4% – representing a drop of 0.5 percentage points compared to 1H 2024. 

f) For the six months under review, operating expenditure amounted to €31.6 million, a 17.0% increase over the corresponding period of 2024. The rise in costs is primarily due to Depositor Compensation Scheme contributions, plus higher regulatory and supervision fees, technology, security and due-diligence advisory expenses. Cost-to-income ratio rose to 77.4% (1H 2024: 70.0%).

Financial Position

g) Group assets stood at €4.3 billion, up by 3.9% from December 2024. The main growth streams were:

  • Net loans and advances to retail and corporate customers which rose by €158.9 million, while loans to banks increased by €25.8 million, with the loan book reaching €3.2 billion. In addition, debt securities grew by €42.4 million, further contributing to the overall growth.
  • Offsetting the aforementioned expansion, cash balances held with the Central Bank of Malta reduced by €43.7 million as previously accumulated liquidity was employed in interest-bearing securities. This was followed by a contraction in the syndicated loan portfolio, which decreased by €17.0 million.

h) Total liabilities closed at €4.0 billion, up by 4.2% over December 2024. Key contributors to this growth were:

  • Customer deposit balances which increased by €179.5 million, underscoring a trajectory of growth that aligns with the broader strategic expansion of the business base. Notably, the portfolio experienced a reallocation towards overnight balances, thereby enhancing the Bank’s funding efficiency and contributing to more optimal cost of funding.

i) Total equity at the end of 1H 2025 was €308.8 million, dipping by €1.1 million from the €309.9 million of 31 December 2024.  The movement in equity was primarily attributable to:

  • The distribution of a cash dividend amounting to €5.9 million, which was partially offset by the recognition of a profit of €4.9 million, alongside the issuance of a scrip dividend in respect of the financial year ended 31 December 2024 of which €0.7 million was retained within equity.

j) The Bank’s CET1 ratio stood at 15.0% (Dec-2024: 14.6%) and the Capital Adequacy Ratio at 20.6% (Dec-2024: 20.1%).

Dividend

The Board is declaring the payment in cash of an interim net dividend of €1,800,000 (gross dividend of €2,769,231), subject to regulatory approval. The net dividend equates to €0.00472 cents per ordinary share (gross dividend of €0.00726 cents per ordinary share) and will be paid to shareholders appearing on the Register of the Central Securities Depository on 1 September 2025 (last trading day 28 August 2025), with payment taking place on 19 September 2025.

CEO Marcel Cassar commented:

“We are pleased to report a performance that is best described as one of two quarters, rather than a first half. After peaking in 2024, the reduction in ECB interest rates is continuing to help the Bank’s funding costs and ease margin pressures, resulting in a rebound in net interest income for 2Q which made it one of the best quarters ever – a trend that is expected to accelerate in the second half. These and other measures are strengthening profitability and improving efficiency ratios, with capital and liquidity indicators remaining strong and asset quality at a multi-year high. We have been able to do all this while remaining competitive with our pricing and continuing to invest in our ongoing transformation, introducing new products and digital channels, simplifying the banking experience and reinforcing customer engagement.

APS Bank and Group remain on a growth trajectory, with renewed focus on organic development by consistently improving our product and service offerings, seeking to cross-sell more and extract greater share of wallet. At the same time, we continue to pursue inorganic opportunities, aimed at gaining more scale and market share as we increasingly become the ‘everyday bank of choice’ for our growing customer base – from young families, to SMEs, to important corporates. Being now the second largest lender to the Maltese economy, we are mindful of our growing systemic responsibility towards both local and international enterprise, and plans are at an advanced stage for a Rights Issue of ordinary equity shares to take place in 4Q 2025. Further details about this important capital raise will be released in the coming weeks, as we approach another milestone aimed at creating greater value for our many stakeholders.”

The Condensed Interim Financial Statements for the period ended 30 June 2025 can also be viewed on the Bank’s website apsbank.com.mt/investor-relations.