As a result of COVID-related impairments, MeDirect reported a loss before tax of €75.2 million over 2020, compared to a pre-tax profit of €7.1 million in the previous year, according to its 2020 financial report.
Of the €65.2 million in COVID-related impairments reported by the bank, €55.7 million occurred during the first half of 2020.
Despite the losses, the Group says it has remained resilient and operates with strong capital and liquidity ratios, well in excess of regulatory requirements.
Reflecting on the year, MeDirect CEO Arnaud Denis commented, “despite the significant and unprecedented challenges posed by COVID-19 on its clients, employees and communities in which it operates, we accelerated the implementation of our business strategy of diversifying the balance sheet and delivering long-term profitable growth as a pan-European retail digital challenger bank”.
“Against this extraordinary backdrop, the Group is proud of the way it responded to the COVID-19 pandemic, prioritising supporting its clients, protecting its people, preserving capital and ensuring the ongoing future value of the business by continuing to invest in the Bank’s platform with a clear strategic intent.
“The Group demonstrated that MeDirect is a strong, resilient and agile organisation, able to protect the interests of all its stakeholders in such a challenging operating environment,” said Mr Denis.
By the end of 2020, MeDirect Group was serving 76,000 clients, up from 67,000 in 2019 and had €2.7 billion in customer deposits.
These figures reflect a 13 per cent annual increase in the number of clients and a 12.7 per cent increase in total customer deposits year-on-year.
Additionally, the bank held €1.2 billion assets under management, comprised of €600 million in Malta and €600 million in Belgium.
The bank’s credit portfolio showed a multi-billion euro exposure, including €1.1 billion in Dutch mortgages, €0.9 billion in international corporate lending and €0.1 billion in Malta corporate lending.
Throughout 2020, the Group said it strengthened its management team at Group and MeDirect Belgium levels and, despite COVID-19, continued to be very successful in attracting high calibre talent and digital experts to support its strategic objectives.
In aggregate, 70 new positions were created across the Group in 2020. Almost two-thirds of the new recruitment was in Technology, Digital Channels, CRM, Product and Marketing and Compliance areas, in order to accelerate the delivery of the WealthTech roadmap, the report revealed.
One of the Group’s competitive advantages, it says, is the efficient and high-quality service centre it operates in Malta, including Technology, Digital Channels, CRM, Operations and other support functions. This service centre acts as the backbone of the Group, supporting the roll-out of its business strategy and in particular the development of its WealthTech platform across different retail markets: Belgium, the Netherlands and Malta, as well as potentially other jurisdictions in Europe.
Dedicated marketing and product teams, as well as control functions, are located in each country. MeDirect says this international set-up enables it to scale up efficiently while remaining flexible and close to local market requirements, in particular from a customer and regulatory standpoint.