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20.08.2020 DURING the first half of 2020, MeDi- rect Group continued to implement its retail digital transformation to deliver long-term profitable growth as a more diversified pan-European retail and dig- ital challenger bank, despite the COV- ID-19 pandemic and its effects on world economies and markets. e Group remains well capitalised and liquid and as a systemically impor- tant bank, it is supervised by the Euro- pean Central Bank. MeDirect Group's client base grew by 8% in the first six months of 2020, from 66,500 to 72,100, in line with the com- pound annual growth rate (CAGR) of 15% during the past two years. e Group's attractive savings prod- ucts and wealth solutions have con- tinued to drive growth in client assets, which have reached €3.7 billion as at 30 June 2020, up 9% from €3.4 billion as at 31 December 2019, in line with the 13% CAGR during the past two years. roughout the first half of 2020, the Group continued to diversify its balance sheet and is on track to meet its target of a €1 billion Dutch government-backed mortgage portfolio by December 2020. During the peak of the COVID-19 outbreak, MeDirect Belgium was the first issuer to securitise a portfolio of Dutch residential mortgages with a third party investor through a Residen- tial Mortgage-Backed Security (RMBS). As a result of the transaction, MeDirect Belgium raised €350 million of long- term lower cost funding and diversified its funding sources. e successful placement of the senior tranche of this large debut transaction in the midst of the crisis reinforced in- vestor confidence in the Group as an issuer. e Group continued to de-risk its historical pan-European international corporate lending business as part of the strategic transformation. is portfolio comprises working cap- ital facilities and other loans which fi- nance companies in the real economy that employ thousands of people across a wide range of sectors, some of which have been more exposed to the impact of COVID-19. MeDirect Malta's local corporate banking business in Malta, accounting for less than 10% of the Group's corpo- rate lending, remains sound and prof- itable. MeDirect Malta has become an accredited financial intermediary under the Malta Development Bank's COVID-19 Guarantee Scheme and has launched its MeAssist product in early May 2020 in order to enhance access to bank financing for its clients. e Group's balance sheet increased by 23% to €3.8 billion during the first six months of 2020, from €3.1 billion as at 31 December 2019. is was principally driven by the €463 million increase in the Dutch government-backed mort- gage portfolio. e total customer deposits grew by 8% to €2.6 billion as at 30 June 2020 from €2.4 billion as at 31 December 2019. e review resulted in the recogni- tion of impairment provisions of €55.7 million for the first six months of 2020, capturing expected credit losses. As a result of the effects of COVID-19, the Group reported a loss after tax of €50.1 million for the six months end- ed 30 June 2020, compared to a profit after tax of €6.9 million for the first six months of calendar 2019. Management estimates that if one-off COVID-related impacts were excluded, MeDirect Group would have recorded a profit after tax of approximately €1.7 million for the first six months of 2020 while continuing to invest actively in the implementation of its transforma- tion, including the build out of its dig- ital platform and the diversification of its balance sheet. MeDirect Group liquidity reserves remain strong at €666.8 million as at 30 June 2020, and LCR stands at 569%, €549.7 million above regulatory re- quirements. MeDirect well capitalised and on track for future growth after absorbing COVID-19 losses MATTHEW VELLA THE turnover from selected services activities has decreased by a massive 27.1% over the same quarter in 2019, as a result of reducing consumption and working hours from the COV- ID-19 pandemic. Seasonally adjusted services turno- ver went down by 27.3 per cent over the previous quarter. The NSO data was compiled from 900 questionnaires to businesses, requesting information on turno- ver, employment, wages and salaries, comparing these levels with previous years. Decreases in turnover were record- ed in the accommodation and food service activities (87.1 per cent), ad- ministrative and support service ac- tivities (49.3 per cent), transportation and storage (47.6 per cent), real estate activities (46.5 per cent), motor trade (37.3 per cent), wholesale trade (21.8 per cent), retail trade (13.5 per cent) and professional, scientific and tech- nical activities (8.5 per cent). Conversely, an increase of 14.8 per cent was registered in the information and communication activities. Em- ployment, gross wages and salaries, and hours worked declined by 7.8, 5.2 and 10.8 per cent respectively over the corresponding quarter in 2019. When compared to the previous quarter, the seasonally adjusted ser- vices turnover index recorded a de- crease of 27.3 per cent. Lower turnover was recorded in the accommodation and food service ac- tivities (94.3 per cent), transportation and storage (46.7 per cent), adminis- trative and support service activities (44.0 per cent), motor trade (33.0 per cent), real estate activities (29.3 per cent), wholesale trade (24.2 per cent), retail trade (15.4 per cent) and profes- sional, scientifi c and technical activi- ties (15.1 per cent). On the other hand, an increase of 3.2 per cent was registered in the infor- mation and communication activities. The seasonally adjusted employment and gross wages and salaries and hours worked) decreased by 9.8, 9.4 and 12.3 per cent respectively. COVID-19 wipes out 87% of turnover for accommodation and food services

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