APS Bank plc has reported a solid uplift in profitability for the nine months ended 30 September 2025, supported by higher lending activity, improved net interest margins, and continued business expansion, according to a company announcement issued on Monday (today).

The group generated a pre-tax profit of €17.8 million during the period, up from €16.5 million a year earlier. At bank level, profitability increased more sharply to €18.2 million from €14.8 million in 3Q2024. Management attributed the result to both revenue growth and measures implemented to reduce pressure on funding costs.

Revenue growth and margin recovery

Net interest income rose by 15.1 per cent to €56.5 million, driven by continued momentum in retail and commercial lending and improved returns from the bond portfolio and liquid assets. Interest expense declined despite higher customer deposit volumes, reflecting a strategic shift towards overnight and demand deposit funding. Net fee and commission income increased by 12.4 per cent to €7.2 million, supported by broader transactional activity as well as lending and investment services.

Other income benefitted from gains on a partial divestment of holdings in an APS Funds SICAV sub-fund, although this was partly offset at group level by negative foreign exchange movements.

Credit impairment charges remained low at €0.5 million, with the non-performing loans ratio improving to 1.4 per cent, signalling stable credit quality alongside a growing lending book.

Operating costs and efficiency

Operating expenses rose by 14.8 per cent to €47.2 million, reflecting earlier due diligence costs linked to the Bank’s unsuccessful bid for HSBC Bank Malta as well as higher regulatory fees and contributions to the Depositor Compensation Scheme. Despite these pressures, profitability metrics strengthened, with core cost-to-income improving to 70.2 per cent from 73 per cent in the prior year.

Strong balance sheet and capital position

Group total assets increased to €4.38 billion, supported by €249.7 million growth in retail and corporate lending and higher placements with banks. Customer deposits rose €242.7 million during the period, while a shift toward lower-cost funding continued to support interest margins. Capital remained solid, with a CET1 ratio of 14.7 per cent and a Capital Adequacy Ratio of 20.2 per cent.

Rights issue underway

Chief Executive Officer Marcel Cassar confirmed that two-thirds of the €45 million rights issue currently underway had already been taken up by existing shareholders and new investors.

Mr Cassar emphasised that the new capital will support investment across technology, distribution channels, product development, and broader business expansion. He reiterated management’s confidence in maintaining profitability momentum, targeting pre-tax profits of €9 to €10 million per quarter in the coming months.