Issue link: https://maltatoday.uberflip.com/i/1111954
02.05.19 2 NEWS THE global economy exhausts its cycle by slowing down after having reached the highest level of growth during 2018, until it approaches the current values that are in line with its trend growth. is is according to MAPFRE's Eco- nomic Research. In this new context, the US economy plays a central role on the future devel- opment of the world economy. is is because of its international visibility, the implications of its trade policy, and its eff ect on the fi nancial markets. In general, 2019 is expected to be a year with less intense growth both in eco- nomic activity and in prices with asym- metric fi nancial conditions between the diff erent economies. Although there are indications of imbalances in the balance sheets of certain economic agents, none of them imply a risk that transforms into a global crises, but rather and or- derly change. Global growth could be around 3.3% in 2019. Developed markets will grow by 2%, supported by domestic demands, gains in fi nancial and real wealth and fi - nancial conditions. On the other hand, emerging markets are expected to grow 5%, due to an improvement in global fi - nancial conditions and to the relaxation in the rate of depreciation of currencies. e Eurozone notes the slowdown al- ready seen since the second quarter of 2018, after having reached the cyclical peak in the transition between 2017 and 2018. e most recent data anticipate a growth of the Eurozone in 2018 that will not exceed 1.9% in 2018 (far from 2.5% in 2017), and given the more advanced indicators such as the PMIs, the slow- down is likely to continue during 2019. us, it is not expected to grow more than 1.7% this year. Global monetary policy is also defi ned by asymmetry. e bias towards neu- trality of the US Federal Reserve stands out against the continued laxity of the Bank of Japan and, to a lesser extent, the European Central Bank. And all this in view of the expectation of relief in emerging markets after the tightening of their monetary position in 2018 as a response to the action of the Federal Reserve. us, the divergences in monetary policy between the United States and other developed markets will result in the maintenance of a relatively appreci- ated dollar, especially against the Euro and the Yen, and in a still depreciated position of emerging currencies. As always, the proper coordination of fi scal and monetary policies will be the key factor in the realization of these sce- narios. MAPFRE's economic research predicts global slowdown FROM PAGE 1 e step was necessary to al- low the bank to expand its cap- ital base. Cassar said the rights issue will raise new equity worth €13 mil- lion in CET1 capital, and will be injected over the coming weeks. APS Bank is owned by the Maltese and Gozitan dioceses with the Metropolitan Cathe- dral Chapter holding a very mi- nor stake. Cassar told BusinessToday the bank's shareholders have all confi rmed their intentions to subscribe to the rights issue in diff erent proportions. He said the fi rst phase would be followed by phases two and three, which are intended to scale up the bank's capital to "much higher levels". "We're looking at raising €70 million by 2020 or 2021. A decision is yet to be taken on whether this will take the form of equity or a hybrid instru- ment, which could include fea- tures of bonds. But it's still early days and those decisions are far away," Cassar said. e bank expected to have a clearer idea by the end of this year on which instruments it will use to raise the level of cap- ital. New omni-channel banking app But the bank also aims to im- prove the customer experience through a new banking app – myAPS – which Cassar said could be seen as "the bank's an- swer to Revolut". e app will be "omni-chan- nel" in nature, meaning that it will allow customers to contin- ue a service, via the app, which would have been originally started at a branch or over in- ternet banking. "myAPS will be the bank's mo- bile app which won't only be a mobile banking solution, but one which is omni-channel. We will be off ering various touch points across mobile, an en- hanced internet banking service and digital interaction in our branches," Cassar said. Bigger role in pensions- related solutions He added that the bank was ac- tively interested in the personal lending segment and retirement and pensions solutions, where it feels there is a considerable market gap. He said the bank would be as- sisting the government with its recently announced home eq- uity scheme – an income sup- plement through which retirees can liquidate up to 60% of their property's value while continu- ing to live in their residence. "As a bank, this is a segment which we like a lot, and we've been working on it for many months, so we welcome the new regulations and the govern- ment's announcement," Cassar underscored. "We are now focusing on en- suring that our products are in line with those regulations, and we want to be a leader in this space, because we do believe there is a market gap in this sector. We know that lifestyles in Malta have improved, but the pension levels have not im- proved commensurably," Cassar said. He noted that equity release from property to supplement pensions was something the bank wanted to be involved in. Net income up 15% APS Bank saw its pre-tax prof- it increase by 1.5% in 2018, to €18.6 million from €18.4 mil- lion. It registered a net income of 15% in 2018 over the previous year, with the bank now having almost €2 billion in total assets. "We now have just under €2 billion in total assets. e bank has doubled in size over the past two years," Cassar noted. Operating income, howev- er, saw a 6% decrease in 2018. While "practically all" of the bank's capital is tier 1, because of the bank's increasing balance sheet and the number of loans which it is off ering, its solvency ratio has decreased from a high of 18% to around 13% as it en- tered 2019. " is is still well above the minimum requirements," Cas- sar emphasised. In 2018, the bank experienced a growth in deposits of 28%, while lending increased by 25%. Home loans remain the bank's major market, constituting 62% of the total loan portfolio. e bank has embarked on a strategy to increase its mar- ket share through strategic se- lective business development, pursuing an operating model centred on three main product segments: personal, business and investment, Cassar said. Cassar added that the bank's means of funding remain "high- ly diversifi ed", with no single source exceeding 4% of the funding base. mcosta@mediatoday.com.mt APS eyeing personal lending segment, pensions solutions APS CEO Marcel Cassar We want to be a leader in this space...We know that lifestyles in Malta have improved, but the pension levels have not improved commensurably