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 2015, while concentrating on maintaining customer deposits within the desired parameters commensurate to asset growth. During the year, significant progress was made 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$2,818,090 (2015: US$4,251,718). The key components of the income statement are; net interest income of US$5,516,183 (2015: US$5,083,909), net fee and commission income of US$813,043 (2015: US$556,185), gains on disposal of available-for-sale financial assets of US$5,395,295 (2015: US$3,220,329), resulting in an operating income of US$11,384,825 (2015: US$9,498,958). The administrative expenses for the year were US$2,905,467 (2015: US$2,627,452) and net impairment charges of US$4,111,992 resulted in profit before tax of US$4,367,366 (2015: US$6,543,793).
Balance Sheet: The year-end balance sheet position of US$154,109,412 (2015: US$192,789,076, reflects the effort made to reduce the level of unapplied cash balances which featured in loans and advances to banks (2015: US$58,180,981). A reduction in excess funding of US$37,501,537 was achieved, thereby reducing the funding cost for the Bank. Loans and advances grew to US$89,031,527 (2015 US$82,186,100) and investments in financial assets reduced to US$20,679,444 (2015: US$58,180,981). The reduction in the investment portfolio was made to realise profit, while reducing market risk on bond holdings, given prevailing market conditions. As mentioned, and in line with strategy, customer deposits reduced to US$120,670,756 (2015: USD143,670,301).
Outlook for 2017: The Bank has now built a regular customer base on both the deposit liabilities side of the business and 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 2017 are encouraging and should lead to increased levels of activity and global trade. 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.