BNF Bank has remained on track and performed remarkably well in the first half of 2022, achieving further solid positive financial results, following suit on its strong financial performance for 2021.
BNF has once again proven its capacity to enhance its brand while continuing to create value. The Bank’s lending book grew by €52.3m and improved in credit quality, with non-performing exposure decreasing by €10.5m. The decrease in non-performing exposure was due to the cure of a non-performing commercial loan and the recovery of various other non-performing loans. Lending book growth was primarily funded by deposits from customers which grew by €96.6m in the first half of 2022.
Building on our current trajectory
The Bank’s capital adequacy ratio as June 2022 was 17.2% compared to 17.5% in December 2021. During the first half of 2022 the Bank, as part of its capital plan, obtained authorisation from the Malta Financial Services Authority to issue unsecured subordinate bond (the ‘Bonds’) of €15.0m with an over-allotment option of €5.0m. In July 2022 the bonds were issued and fully subscribed one week in advance of its closing date at €20.0m. The bonds meet the criteria to qualify as Tier 2 capital and will increase the Capital Adequacy Ratio further in the second half of the year.
Net interest income remained the main driver of the Bank’s profitability and has increased by 15% to €12.6m in the first half of 2022. The increase in net interest income in the first half of 2022 pertained mainly to lending book growth.
Operating costs amounted to €9.2m for the first half of 2022 capped to €8.1m for the first half of 2021, the majority of the increase being a cash contribution payable to the Depositors Compensation Scheme upon Legal Notice 193 of 2022 coming into force. Adjusting for the latter, the Bank’s cost-to-income ratio would have improved due to positive jaws being generated between operating income and operating expenses.
Chief Financial Officer Mark Micallef said that “With our annual targets and objectives for our Vision 2023 strategy firmly in sight, we are focused on driving our growth plans to ensure continued competitiveness and excellence in customer service. This is at the heart of why and how we create value responsibly for all our stakeholders.”
Michael Collis, the Bank’s CEO and Managing Director expressed his satisfaction at the Bank’s performance, commenting that “Mindful of the current global uncertainty and instability, we are convinced that our unique proposition, our strong brand portfolio, the agility of our teams and our financial strength will enable us to pursue our profitable and sustainable growth strategy. We remain optimistic about the outlook for BNF Bank and are confident in our ability to achieve another year of growth.”