The Company's principal activity is the operation of a credit institution under the Banking Act, Cap 371 of the Laws of Malta, in accordance with the credit institutions license granted by the Malta Financial Services Authority. The Bank is a niche international trade finance bank with customers spread over Europe, the Middle East, Asia and Africa, and provides facilities and trade services, primarily to import/export companies, especially those trading with and in emerging markets.
Performance: IIG Bank continued to register significant progress in developing its business strategy which is targeted towards a global presence in international trade and commodity finance. This development was supported by yet another year of significant profits despite a focus on maintaining balance sheet size consistent with the average level of 2016, while concentrating on maintaining customer deposits within the desired parameters commensurate to asset growth. During the year, Senior management ensured that significant progress was maintained in the internal organisational structure, with additional recruitment of skilled human resources, enhancing the operations team, risk management and compliance functions.
Income Statement: During the financial year under review, the Bank registered a profit of US$1,710,520 (2016: US$2,818,090). The key components of the income statement are: net interest income of US$4,826,218 (2016: US$5,516,183), net fee and commission income of US$1,209,453 (2016: US$813,043), gains on disposal of available-for-sale financial assets of US$1,019,252 (2016: US$5,395,295), resulting in an operating income of US$6,359,356 (2016: US$11,384,825). The administrative expenses for the year were US$3,782,859 (2016: US$2,905,467) and net impairment credit of US$83,552 (2016: net impairment charges of US$4,111,992) resulted in profit before tax of US$2,660,049 (2016: US$4,367,366). The net impairment charge to profit and loss in 2016 includes a write-off of US$3,201,188 (see Note 25).
Balance Sheet: The year-end balance sheet position of US$191,538,153 (2016: US$154,109,412), reflect the higher levels of unapplied cash balances which featured in loans and advances to banks amounting to US$ 52,555,939 (2016: US$20,679,444). Lower utilisation on facilities granted by the Bank resulted in a decrease in Loans and advances to US$81,228,230 (2016 US$89,031,527) whereas excess liquidity was allocated to investments in financial assets which grew to US$52,555,939 (2016: US$20,679,444). In line with strategy, the Bank continued to offer competitive deposit products which is reflected in an increase in customer deposits to US$159,873,126 (2016: US$120,670,756).
Outlook for 2018: The Bank has now built a regular customer base on both the deposit liabilities side of the business and its loan asset portfolio. Significant progress and opportunities of business continue to flow despite the moderate marketing effort, as the Bank concentrates to maintain its high standard of service delivery to its clients. The initial economic indicators and inflationary expectations for 2018 are encouraging, despite the threats on global trade posed by trade barriers and sanctions. The Bank is very well prepared to take advantage of the evolving opportunities, while still retaining a very positive growth outlook should market conditions not develop in line with existing expectations.