Malta-based MeDirect Group (MDB Group) has announced pre-tax profit of €14.3 million for the financial year ended 31st December 2023, 56.1 per cent higher than in the previous year (€9.2 million).
The results were released in the group’s Annual Report and Financial Statements for 2023, published on Wednesday. In the report, the group stated that the results were achieved in a year in which it was focused on “building sustainable growth, supported by cutting-edge technology and model scalability.”
Net interest income for the year increased by 42.6 per cent to €82.3 million (2022: €57.7 million). This was primarily a result of a rise in loans and advances to financial institutions, totalling €47.4 million for the year (2022: €908,000), as well as a substantial increase in interest on loans and advances to customers, amounting to €119.1 million (2022: €75 million).
Net fee and commission income amounted to €5.1 million, down from 2022’s €6.1 million, primarily a result of an increase in corporate secured lending fee expenses.
Personnel expenses remained relatively stable at €24.3 million, while depreciation and amortisation charges decreased slightly by 9.5 per cent to €5.6 million. On a weekly average during the year, MDB Group, employed 344 people, including Executive Directors. This was slightly lower than in the previous year (2022: 348), yet there were more people employed in executive and senior management positions in 2023 (2023: 25; 2022: 16). During the year, it had employees from over 30 nationalities, with 61 per cent of the workforce being male and 39 per cent female.
On the other hand, other administrative expenses rose by 16.8 per cent to €43.4 million, driven by boosts in legal, professional and marketing expenses (2023: €17.8 million; 2022: €12.9 million).
Changes in expected credit losses and other credit impairment charges went down from €2 million in 2022 to negative €945,000 in 2023.
During the year, MDB Group’s total retail client base increased by 23 per cent to reach 133,000, while customers’ financial assets also grew by 18 per cent to €5 billion, of which €1.7 billion were assets under custody with the group.
In 2023, MDB Group’s balance sheet grew by seven per cent to €5 billion, while it continued to de-risk, reducing its international corporate lending portfolio to €328.5 million, representing less than seven per cent of total assets and 12 per cent of the lending book.
MDB Group’s total mortgage portfolio increased by 22 per cent during the year, going up from €2 billion to close to €2.5 billion. Dutch Government guaranteed (NHG) mortgages passed the €2 billion-mark, Belgian mortgages exceeded €250 million and Dutch professional buy-to-let mortgages reached €85 million. In Malta, the mortgage book reached almost €100 million, with the offering also being broadened to add property investment loans, as well as an 18-month interest only feature.
After MDB Group’s Directors considered the financial performance of the group, they did not recommend the payment of a final dividend, stating that it is “determined that the group should conserve its capital to maximise its ability to support its customers, to continue to strengthen its balance sheet, and to invest selectively in its wealth platform.”
The group also expanded the retail products available on its one-stop-shop platform, while MeManaged, its discretionary portfolio management service already available in Malta, was further rolled out to Belgium and the Netherlands.
Commenting on the results, CEO Arnaud Denis said that 2023 proved to be a year during which the group “continued to deliver at a rapid pace” and consolidate its platform.
“We steadily scaled our businesses both on the wealth and lending side. We now have the ambition as Malta’s first digital bank to become our customers’ primary bank,” he added.
“While great technology and client centricity remain at our core, our sustainable growth strategy relies on investing selectively, cost control and effective risk management to improve the bank’s profitability in what remain uncertain global macroeconomic conditions,” Mr Denis stated.
MDB Group is the parent company of MeDirect Bank (Malta) plc, a pan-European digital bank that is headquartered in Sliema. In recent years, it also expanded operations to also have a subsidiary bank in Belgium, and also launched its web and mobile platform in the Netherlands.
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