Izola Bank has announced a profit after tax for 2020 of €385,220, a drop of 74 per cent when compared to the preceding year.

In its financial statements, posted to the Malta Stock Exchange, the Bank said that it managed to generate four per cent growth in its interest income over 2019 levels, although this was significantly lower than projected.

Its interest expense meanwhile increased by 26 per cent, resulting in a net interest income loss of 10 per cent when compared to the previous year.

This decrease, coupled with the increase in related Depositor Compensation Scheme contributions, a non-recurrent item, resulted in the sharp drop in profits.

Izola Bank said out that although its cost-to-income ratio increased from 61.4 per cent to 86.9 per cent, this was primarily the result of the impact of the Depositor Compensation Scheme contribution.

Adjusted for this contribution, the cost-to-income ratio would be 68.5 per cent, which the Bank pointed out is very much in line with the industry norm.

The Bank said that “2020 has undoubtedly been a challenging year with the global economy experiencing unprecedented shocks from the outbreak of the COVID-19 pandemic and the ongoing economic uncertainty brought about by such an event”.

It called on the relevant authorities at all levels to continue to take decisive and timely actions to safeguard the physical and economic health of all economies and provide a solid foundation for recovery to take place.

The Bank said that against this background, and whilst containing spend on recurrent expenditure, it continued investing in its staff complement and key ancillary support services to position itself for its next growth phase.

“At Izola Bank, we have remained focused on being of support to our customers, especially those directly impacted by the pandemic, in such difficult times in order to help safeguard the viability of their businesses and those dependant on them.”

Additionally, Izola Bank continued taking an active role in society by investing in community-based organisations, building on its partnership with Foodbank Lifeline Foundation, which provides short-term emergency food packs to people in desperate need.

It said that in 2020, it continued its support, both financially and in practical terms, to meet the increasing demand for the Foodbank’s services, which became even more relevant this year.

“Our ambition is to continue helping Foodbank Lifeline not only ease hunger in Malta, but also to significantly reduce food waste and carbon emissions.”