In the face of geopolitical tensions, economic fluctuations, and rapid technological advances, Lidion bank is charting a trajectory of growth, reporting three straight years of profitability – €0.6 million in 2022, €1.6 million in 2023, and €3.2 million in 2024. As a result, return on equity has increased from six per cent to 20 per cent for the same period.

A recent conversation with Chief Financial Officer Luke Calleja revealed that these notable performance metrics have been achieved through a concerted effort to reduce the bank’s cost income ratio (62 per cent in 2024, marking a substantial improvement from 2022’s 88 per cent) and to raise its revenue (€15 million in 2024, up from €10 million in 2023 and €7 million in 2022). This upward direction has been helped by Lidion Bank’s capital adequacy, liquidity coverage and net stable funding ratios which are well above the EU-mandated minimums, Mr Calleja shares.

Examining the increased financial fortitude more closely, Lidion’s CFO says the company’s successful 2024 equity raise – bringing its capital base to €23 million – provided sufficient headroom for strengthening tech infrastructure and tightening operations. This is especially crucial given the company’s designs on further EU client acquisition, made possible by its “EU-wide passporting that enables continental expansion while keeping Malta as operational HQ”.

These foundations have positioned Lidion to pursue a natural next stage in its evolution: a €5 million bond issuance in July 2025, the first tranche of an overall €10 million programme.

Lidion’s growth engine, Mr Calleja continues, is powered by a balanced, highly intentional, “three-pronged product mix”. On the cash management side, the company provides corporate banking and payment services for predominantly Malta-based clients – maintaining an eye on EU expansion in future. “High-touch onboarding and flexible account offerings are among the USPs and further tech-driven investment is underway to enhance our digital channels. We’ve also been happy to pass on positive gains to our corporate clients, resulting from ECB interest rate fluctuations when and where possible – a major differentiator along with our personalised service.”

Lidion’s B2B factoring service, focusing on the EU’s digital advertising sector, is the second branch of its product range and a key growth driver – success in this niche area largely led by “efficient application procedures and speedy activation of financing”. Such responsiveness has enabled rapid scaling of this product line: total receivables financed rose from €125 million in 2022 to €279 million in 2024. As a result, the factoring book closed at €68 million in 2024, up by €36 million compared to 2022.

Finally, the bank’s lending specialises in tailored property-backed loans, alongside other traditional credit lines. “Although clients’ loan requirements must meet our minimum threshold, the major upside is that we offer flexible, bespoke solutions built around the client’s specific needs, as opposed to limiting them to restrictive, ‘boxed’ products, prevalent at legacy financial institutions,” Mr Calleja clarifies.

Widening the gap further between itself and traditional banks, Lidion has been investing heavily in automation and technology as part of an ongoing drive to bolster internal processes, cost efficiency, and front-facing services.

Against this optimistic background of agility, scalability and resulting growth, providing confidence to investors, Mr Calleja is transparent about being cautious amidst opportunity. “The impact of interest rate reductions on margins, profitability and competition for deposits are all hurdles for smaller banks. Talent acquisition also remains a bottleneck, especially for specialised roles.”

Meanwhile, macroeconomic uncertainty (including tariff wars and a global recession threat) creates further serious challenges, potentially heightening provisioning pressures. Such factors being beyond the bank’s control, Mr Calleja highlights, “Lidion has nevertheless successfully identified its niche in an increasingly competitive landscape.”

Moreover, it has done so while adhering to a broad suite of EU regulations, including two major frameworks that came into force this year: DORA (ensuring operational and security resilience) and CRR III (geared towards financial resilience).

Always keeping feasibility (a CFO’s non-negotiable) in view, Luke Calleja reinforces the importance of pursuing sustainable expansion and not tripping over ambitions. “Our approach to risk management underpins Lidion Bank’s stability and counterbalances the rapid growth,” he affirms, wrapping up. “We invest heavily in maintaining a robust control framework and our business model is fully aligned with the growth trajectories we see for the bank,” Mr Calleja assures. “It’s about growing in a careful and measured manner.”