Sparkasse Bank Malta plc registered €18.1 million in pre-tax profit during 2023, representing a 242.1 per cent increase over 2022 (€5.3 million).

The results, published in the bank’s Annual Report for the financial year ended 31st December 2023, highlight a significant improvement in Sparkasse Bank Malta’s performance during the year.

Sparkasse Bank Malta is licensed by the Malta Financial Services Authority (MFSA) to provide services tied to banking, investment services, wealth management services, and depository and custody services. The bank recently initiated the application process to obtain authorisation from the MFSA to provide discretionary portfolio management services.

Net interest income rose sharply from €5.4 million in 2022 to €20.2 million, primarily as a result of an increase in balances held with the Central Bank of Malta (2023: €19.7 million; 2022: €2.7 million). On the other hand, net fee and commission income dropped by 10 per cent to €8.2 million in 2023 (2022: €9.1 million).

As a result, the bank reported a record operating income of €29.9 million in 2023, an upturn in performance from the €15.7 million that was registered in 2022.

In line with the improved performance, employee compensation and benefits were also on the rise, going up by 31.8 per cent to €6.9 million (2022: €5.2 million). This increase also included the bank’s liabilities for post-employment and other long-term employee benefits arising from its remuneration policy. In fact, these benefits accounted for €1.2 million of the total employee compensation and benefits expense.

Other operating costs amounted to €3.6 million, while the depreciation of property, plant and equipment and right-of-use assets stood at €929,428.

Total assets as at the end of 2023 stood at €937.5 million, a considerable expansion from the €899.3 million reported in the previous financial year.

The Board of Directors of the bank is proposing a final dividend of €6 million, reflecting a dividend per ordinary share of €129.87, out of which €2 million is expected to be re-invested in the bank as additional share capital, subject to MFSA approval.

In his comments on the results, Managing Director and CEO Paul Mifsud said that the bank is “proud” of its performance during the year.

Sparkasse Bank Malta Managing Director and CEO Paul Mifsud

“We have increased our operating income to a record level and while interest rates have helped tremendously, the core business lines of the bank have remained robust and sustainable with custody and depositary services at €8.8 billion, while total assets are standing within the €1 billion mark,” he remarked.

“The success of our business is attributable to the dedication of our team of professionals and our unique business model,” he added.

When asked about the current year, Mr Mifsud commented that the outlook for 2024 is “positive,” with first quarter figures on track and in line with budgets, indicating another record year. He added that the pipeline of new work from both Malta and Ireland is encouraging.

“We are confident that 2024 will be another good year for us with both Malta and Ireland showing good prospects for the bank. This positive outlook has encouraged our shareholders to invest further in the bank by increasing its share capital from the profits generated in 2023,” he continued.

“Sparkasse Bank has been operating in the local market for 24 years and we next look towards celebrating our 25th anniversary in 2025 with stronger results,” Mr Mifsud concluded.