APS Bank plc reported a resilient first-half performance for 2025, with results buoyed by a strong second quarter that offset a softer start to the year. The bank’s Board of Directors approved the condensed interim financial statements for the six months ended 30 June 2025, highlighting a recovery in operating revenues and profitability that is expected to accelerate in the second half.

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The half-year results come against a backdrop of elevated geopolitical tensions, new trade tariffs, and global economic uncertainty that have left economies moving at different speeds. Despite this challenging environment, the Maltese economy continued to perform steadily, helping APS Bank maintain its growth trajectory.

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Financial Performance

At Group level, APS Bank delivered a pre-tax profit of €9.1 million, compared to €10.1 million in the same period of 2024. At the Bank level, profit before tax was €10.2 million, up from €9.9 million in the first half of 2024.

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Net operating income rose by 10.6% year-on-year, supported by growth in the core retail and commercial lending portfolios. Interest income increased to €60.1 million, a 7.3% rise from 1H 2024, with gains in loans and advances more than compensating for a decline in income from syndicated loans. Interest payable increased to €24.5 million, reflecting an expanding customer base and competitive deposit pricing, though funding costs are decreasing thanks to a reallocation toward overnight and demand deposits.

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Net interest margin strengthened during the second quarter, complemented by a 2.9% increase in net fee and commission income to €4.6 million, mainly from advances, card services, and transaction banking. Other operating income totaled €0.5 million, down €0.3 million from the previous year due to adverse foreign exchange movements.

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Net impairment losses fell significantly to €0.5 million from €2.0 million in 1H 2024, reflecting strong credit quality and underwriting standards. The bank’s non-performing loans ratio improved to 1.4%, down 0.5 percentage points from a year earlier.

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Operating expenses rose by 17% to €31.6 million, driven by higher contributions to the Depositor Compensation Scheme, increased regulatory and supervision fees, and advisory costs linked to the due-diligence exercise for a potential acquisition of HSBC Bank Malta. These costs pushed the cost-to-income ratio to 77.4%, up from 70% a year earlier.

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Financial Position

APS Bank’s total assets reached €4.3 billion at the end of June 2025, up 3.9% from December 2024. Growth was fueled by a €158.9 million increase in net loans and advances to customers and a €42.4 million rise in debt securities, partially offset by a reduction in cash balances with the Central Bank of Malta and a €17 million contraction in the syndicated loan portfolio.

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Total liabilities increased 4.2% to €4.0 billion, driven mainly by a €179.5 million increase in customer deposits. The deposit portfolio also saw a shift toward overnight balances, improving the bank’s funding efficiency.

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Equity dipped slightly to €308.8 million from €309.9 million at year-end 2024, reflecting a €5.9 million cash dividend, partly offset by €4.9 million in retained profit and a €0.7 million scrip dividend. The bank’s CET1 ratio rose to 15.0%, while the Capital Adequacy Ratio improved to 20.6%.

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Dividend and Outlook

The Board declared an interim net dividend of €1.8 million (gross €2.77 million), equal to €0.00472 per share net of tax, to be paid on 19 September 2025 to shareholders on the register as of 1 September.

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CEO Marcel Cassar described the performance as “one of two quarters, rather than a first half,” highlighting the significant rebound in Q2 as ECB interest rate reductions eased margin pressures and drove net interest income to one of its highest levels ever. Cassar said the bank remains focused on organic growth through improved product offerings and digital transformation, while also pursuing selective inorganic opportunities to gain market share.

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He also confirmed plans for a rights issue in the fourth quarter of 2025 to support the bank’s continued expansion and systemic role as Malta’s second-largest lender.

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