Izola Bank plc registered a profit after tax for the year 2025 of nearly €0.6 million, after having reported a loss of nearly €3 million in 2024.

“The 2025 financial results reflect a year of disciplined balance sheet and cost management in a gradually normalising interest-rate environment, with a clear focus on funding-cost optimisation, margin preservation, and prudent execution,” Izola Bank Chairperson Caroline Van Marcke said.

Net interest income increased by 25 per cent to €7.7 million, which the chairperson said was driven by funding cost optimisation and pricing improvements. Interest and similar income declined by 15 per cent to €19.0 million, “reflecting the reduction in market interest rates and balance sheet recalibration. This reduction was more than offset by materially lower funding costs, with interest expense decreasing by 30 per cent to €11.3 million.”

Operating expenses declined year on year. Employee compensation and benefits amounted to €3.35 million (2024: €3.40 million), and other administrative expenses decreased to €3.18 million (2024: €5.45 million), “primarily the result of the absence of Depositor Compensation Scheme contributions for the year and a significantly reduced marketing spend,” she said.

In terms of total assets, a drop was seen. In 2025, Izola Bank had €399.7 million in total assets, while in 2024 it had €503.8 million.

The Chairperson said that the year-on-year contraction reflects deliberate balance sheet optimisation and selective origination aligned with margin, liquidity, and risk appetite considerations. “Loans and advances to customers stood at €136.7 million (2024: €194.0 million), while factored receivables amounted to €116.6 million (2024: €138.2 million).”

Customer deposits, the bank’s principal source of funding, totalled €338.1 million (2024: €448.6 million), the chairperson said. “This recalibration of deposit volumes is consistent with the calibration of the asset base.”

The Chairperson said that the operating environment in 2026 is expected to remain challenging and uncertain, the Chairperson said. Here, she said that heightened geopolitical tensions, including developments in the Middle East, together with ongoing macroeconomic volatility, inflationary pressures, and evolving interest rate expectations, continue to shape market conditions and present challenges for the banking sector.

“Against this backdrop, the bank’s priorities for 2026 are firmly centred on preserving financial stability and sustaining capital and liquidity strength within a disciplined and prudent risk framework. Despite potential headwinds affecting near-term performance, the Board and senior management remain focused on disciplined execution and ensuring ongoing balance-sheet resilience”

The bank also plans to continue progressing its digital transformation initiatives.

Separately, the bank’s shareholders advised the Board that discussions remain ongoing with multiple potential investors regarding a possible change in the bank’s ownership structure. “The Board will consider any binding offer once it is formally submitted and subject to receipt of all necessary regulatory approvals.”