MeDirect Bank (Malta) plc reported a loss before tax of €6.1 million for the financial year ended 31st December 2025, according to its latest audited financial statements, as the group undertook a series of strategic measures aimed at repositioning the business for future growth.

The result compares with a €5.0 million loss before tax in 2024, with the bank attributing the outcome largely to deliberate, non-recurring factors linked to portfolio restructuring, regulatory constraints and post-acquisition adjustments.

Excluding one-off items, the group generated an underlying net operating profit of €0.8 million.

Operating income declined by €8.9 million year-on-year, primarily due to the accelerated wind-down of the Institutional Credit Lending (ICL) portfolio, which had historically been one of the bank’s highest-margin asset classes but was no longer considered core to its strategy.

The ICL portfolio was reduced by 90 per cent to €21.5 million, a move designed to simplify the Group’s balance sheet and reduce risk exposure.

When excluding the impact of the ICL exit, operating income increased by €1.2 million (1.3 per cent). This growth was supported by expansion in mortgage lending, stronger performance in Maltese business banking and rising wealth management revenues.

Wealth management fees increased 10.3 per cent to €7.9 million, reflecting increased client activity on the bank’s investment platform.

Operating costs rose by €4.7 million, largely due to €4.2 million in additional regulatory charges, including contributions to depositor compensation schemes and supervisory fees. Excluding these charges, the bank indicated that the underlying cost base remained broadly stable.

Expected credit losses (ECLs) amounted to a net charge of €2.9 million, significantly lower than the €19.3 million charge recorded in 2024, largely due to the unwinding of credit provisions related to the ICL portfolio.

However, despite the loss, the group’s balance sheet continued to expand.

Total assets increased by 5.2 per cent to €5.34 billion at the end of 2025, while net loans and advances to customers rose by 3.3 per cent to €3.0 billion.

Excluding the reduction in the ICL portfolio, underlying lending balances grew 10.4 per cent.

The bank highlighted strong momentum across several loan segments:

• The Belgian residential mortgage portfolio exceeded €500 million, representing a 48 per cent increase.
• The Dutch buy-to-let mortgage portfolio grew 43 per cent to €248.3 million.
• Maltese mortgage lending expanded by 17 per cent.
• Business lending in Malta increased by 35.6 per cent.

Customer deposits also continued to grow, rising 6.7 per cent to €4.1 billion.

Meanwhile, the bank’s non-performing loan (NPL) ratio improved significantly to 0.9 per cent, down from 2.2 per cent in 2024, reflecting the completion of a broader de-risking strategy.

Capital and liquidity strength

MeDirect maintained strong capital and liquidity positions, with all regulatory ratios exceeding minimum requirements.

The Liquidity Coverage Ratio (LCR) reached 196 per cent, up from 183 per cent in 2024, while the Net Stable Funding Ratio (NSFR) stood at 133 per cent, compared with 122 per cent the previous year.

The bank’s Tier 1 capital ratio rose to 20.8 per cent, up from 16.4 per cent in 2024, while the total capital ratio increased to 23.5 per cent, compared with 19.8 per cent a year earlier.

The leverage ratio also strengthened to 4.8 per cent, supported by additional shareholder capital and disciplined balance sheet management.

During 2025, MeDirect also underwent a change in ownership following the acquisition of MDB Group Limited by Czech banking group Banka CREDITAS, which invested €40 million in new capital and committed to further investment in 2026.

The year also saw the appointment of Jean-Claude Maher as Group Chief Executive Officer, bringing more than three decades of banking experience to the role.

The bank stated that the reported loss reflects a deliberate strategy of front-loaded restructuring, balance sheet de-risking and the absorption of non-recurring charges.