MBR_ISSUE 42_LowRes

COVER STORY INTERVIEW
Malta Business Review
MBR: FIMBank has recently announced
positive financial results. What are the
key elements which constitute the Bank’s
successful business model?
RM: FIMBank is a trade finance Bank with
its very core business centred around
trade between countries and continents.
Since trade is a prime mover for the global
economy, FIMBank has positioned itself in
key geographical regions trailing the major
trade flows and financing an extensive
range of commodities. These transactions are
relatively short-term in nature, with a typical
transaction maturing within an average of
180 days. What makes this interesting is the
fact that the transactions are self-liquidating
with the repayment of the financing
structure being generally derived from the
delivery of the goods. The short-term nature
of the business enables the Bank to adapt
to changing landscapes be they economic,
political or others impacting the business.
FIMBank also has a network of regional
offices or subsidiaries strategically located to
service the different types of clients and the
various stages of a trade transaction. Our
model revolves around a suite of products
including trade and commodity finance,
forfaiting and factoring, complemented by
the more traditional payments and cash
management services.
MBR: What has been done in recent years to
ensure optimisation of FIMBank’s financial
model?
RM: The Bank has never shied away from
adapting to different business realities and
exploring new areas of commercial growth.
One particular niche we have been operating
in over the years is the ship finance business
which complements the trade finance model.
FIMBank is ultimately a client-centric business
and with a business model able to adapt to
clients’ needs. Over the years we have looked
at our operations in the different geographical
regions and have rationalised on some whilst
expanding others. We also addressed our
service delivery channels by for example
launching FIMBank Direct, a state of the art
self-service digital banking platform enabling
our clients to have direct access to their cash
balances and catering for their trade finance
and foreign exchange needs. Another niche
area of business being tapped into here in
Malta is real estate financing – targeting
reputable developers who are aiming for a
personalised service and to whom FIMBank
can then extend its wider range of expertise
and services.
MBR: FIMBank had recently announced a
Rights Issue. How will this impact the Bank’s
upward trajectory?
RM: With a recent capital injection in excess
of 100 million dollars, it is imperative that
FIMBank maintains the pace of transformation
and delivery of results. The Group is now able
to expand its business reach and grow its loan
book. This means that FIMBank will be able
to service its larger clients in a more effective
way and also widen its client base to a level
which was not possible to achieve before.
More diversification is also synonymous with
a superior risk culture, with the latter being
a central theme during the last turnaround
years and will continue being perennial in
the years ahead. The Rights Issue was also a
tangible show of support and backing by the
Bank’s majority shareholders sealing one of
the largest foreign direct investments in Malta
over the last years.
Looking ahead, the driver
for success lies in our spirit
to achieve better scale whilst
remaining rooted to our business
fundamentals and expertise
MBR: What effect will the capital injection
and continuous accounting and regulatory
changes have on the Bank’s financial
performance?
RM: The new investment in the Bank will in the
first instance strengthen its capital base in a
regulatory landscape which requires stronger
banks to safeguard the interests of depositors
and the wider economic stability of nations.
The ability to source additional business will
in turn result in more revenues, and the ability
of the Group to utilise its current capacity
more efficiently. At the same time, the risk and
governance culture put in place over the last
years will safeguard the Bank from problematic
loans, especially when considering the advent
of IFRS9 and its consequences on the new
way to measure impairments. A stronger
capital, more diversification and enriched
risk frameworks will address not just the
accounting and regulatory changes but also to
sow the seeds of success in the coming years.
MBR: Do you anticipate any increase in
costs because of these regulatory changes
and how is FIMBank prepared to adapt?
RM: Changes, be they imposed externally
or mandated from within, invariably pose
an opportunity to renovate and excel. Such
a process might bring with it short-term
additional costs but in the longer term it
would generally result in strengthened
operational, business and risk processes.
One way how FIMBank is adapting to this is
through an enhanced digitalisation process
aimed at uplifting the current business
processes to a superior rank. Digitalisation
will focus on various areas of the business
– customer relationships and on-boarding
technologies, compliance, risk and regulatory
reporting to name just a few. An advanced
use of technology is objectively a more
efficient and result-driven way to manage our
business, with its short-term pains but longerterm
success.
MBR: What are the key financial areas that
FIMBank plans to improve?
RM: Over the past 3 years FIMBank has
implemented a turnaround strategy firmed
in the way it operates in a number of key
matters mainly on business origination, risk,
governance, and cost efficiency. This process
has been pivotal in delivering profits coupled
with a decreasing level of non-performing
loans and culminating in the recent Rights
Issue. As the Bank continues on its path for
superior delivery and returns, we remain
committed to become more efficient in the
use of our existing resources and available
capacity, exploiting our global presence to
source and churn assets, and so generate
more revenues at a much higher rate than
additions to costs. Another area of focus is
the recovery process of delinquent loans, for
which we have set up a dedicated function
here in Malta. Looking ahead, the driver for
success lies in our spirit to achieve better
scale whilst remaining rooted to our business
fundamentals and expertise. MBR
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