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4 NEWS 5.5.2022 MAPFRE Middlesea plc recorded €20.4 million profit before tax in 2021, down slightly from 2020. is was announced at an annual gen- eral meeting during which the accounts for the financial year ended 31 Decem- ber 2021 and the reports of the direc- tors and auditors were approved. e AGM also approved a final gross dividend of €0.0304012 per share for shareholders. Premiums written amounted to €405 million, with significant growth in both long-term business and non-life. CEO Javier Moreno noted that in 2021 the company launched the pioneering electric vehicle policy, more adaptable and simplified offerings for SMEs, and introduced COVID coverage in their travel policies. "Although uncertainty is never good for business, our excellent financial per- formance reflects the remarkable efforts of all our teams, our intermediaries and our strategic partners," he said. "With- out a doubt, MMS has the widest cover- age of insurance solutions allowing our intermediaries to always meet the needs of each family and every company." Moreno said that the reinsurance protection offered to the company by MAPFRE Re, the MAPFRE Group re- insurance company, provides cover for significant losses and ensures that the company's solvency is not impacted by such occurrences. He highlighted that MAPFRE MSV Life has achieved a very positive finan- cial result for its policyholders, result- ing in the allocation of a regular bonus of 2% continuing to offer the widest range of protection, savings and retire- ment solutions on the market. More said MAPFRE is a committed company that is concerned about its so- cial presence and believes that business development also entails a demanding, social, environmental and governance commitment to protect the legacy handed down to our future generations. José Ramon Alegre, Antoinette Caru- ana, Gordon Cordina, Martin Galea, José Luis Jiménez, José Maria del Pozo, Etienne Sciberras, Robert Suban and Paul Testaferrata Moroni Viani were appointed to the board of directors. e appointments of Gordon Cordina, Etienne Sciberras and Robert Suban are subject to regulatory approval and their appointment will become effective from the date of such approval. Martin Galea was appointed as Chair- man of the Board of Directors of MAP- FRE Middlesea plc. MAPFRE Middlesea recorded €20.4 million profit before tax in 2021 FOR the quarter ended 31 March 2022, the Group and the Bank posted a pre- tax profit of €1.9 million (same period 2021: €3.8 million) and €8.7 million (2021: €3.9 million), respectively. ese contrasting outcomes emerge from a mixed start to 2022: strong operating performance in a climate overshad- owed by market volatility arising from the Russian invasion of Ukraine and lin- gering pandemic effects. Net Interest Income increased by 14.8% to €14.7 million compared to the €12.8 million of the same period in 2021. e continued growth in the loan book pushed interest income from lending activity to €16.6 million (2021: €16.3 million), as more efficient funding management saw interest expense drop marginally to €3.3 million despite the growth in the Group's customer depos- its portfolio. During the quarter under review, net fee and commission income rose by 55% to €1.7 million due to general busi- ness growth and new non-banking rev- enue streams from the Group's invest- ment services offerings, including the funds and pension plans. As the Bank's Operating Income rose sharply from €14.1 million in 2021 to €19.5 million this quarter, that of the Group contract- ed to €13.3 million when compared to the €14.2 million of Q1 2021. is was mainly driven by price movements on the sub-funds' financial instruments, which for the period declined in value by €3.6 million (2021: €0.1 million). is change, mostly unrealised, is driven by the volatility in the financial markets compounded by the impact of the con- flict, supply-side disruptions, inflation and fixed-income yields adjustment throughout the quarter under review. Group Operating Costs increased by €0.8 million to €10.3 million, reflecting continuous investment in technology, human capital and the latest systems and methods, within a strategic context that keeps quality customer service at the centre of the Bank's ethos. Largely as a result of the market-driven instabil- ity in operating income, the Group's and Bank's cost-to-income ratios respective- ly worsened and improved. Impairment losses for the period amounted to €0.6 million, compared to €1.0 million post- ed for Q1 of 2021. is is once again testimony to the Bank's strong busi- ness model and its prudent approach to credit underwriting, as practically all Covid-19 moratoria are finally expiring with the last few facilities, mainly com- mercial, performing normally and not a single default experienced. At 31 March 2022, the Group's Total Assets stood at €2.9 billion, growing by a further €100 million over the quar- ter. As the deposit market remained buoyant, liquidity and credit activi- ty expanded by a net €70 million and €30 million respectively, with the loan book now reaching €2.1 billion. Cus- tomer deposits in fact grew by €121.8 million, reaching €2.6 billion by the end of the quarter – driven by an increase of €128.9 million in overnight deposits with a reduction of €7.0 million in term deposits, improving further the Group's funding mix. New credit origination was largely fuelled by a consistent mo- mentum in home loan activity which accounted for most of the increase, while the commercial lending portfolio retracted slightly as borrowing patterns of business customers remained guard- ed. e international syndicated loan book also decreased marginally over the quarter reflecting a more cautious appetite due to heightened geopolitical and cross-border risks. For the period, Equity was also im- pacted by the market movements how- ever with a CET1 ratio of 12.7% and a Capital Adequacy Ratio of 16.7%, the Bank satisfies the required regulatory thresholds including buffers. Marcel Cassar, Chief Executive Of- ficer, commented, "2022 got off to an extraordinary start as the impetus which developed during 2021, on the back of a post-Covid economic rebound and more favourable global financing conditions, experienced a new series of shocks. Most prominently, the ongoing conflict between Russia and Ukraine has further disrupted supply chains, contributing to a now persisting infla- tion and the prospects for higher inter- est rates which could stifle recovery go- ing forward. Such global developments are felt also in our widely open economy through higher costs of inputs and im- ported goods. On a positive note, recent estimates by the IMF revised domestic 2022 GDP growth at 4.8% (higher than EU estimates) and CPI inflation peak- ing at 4.7% in 2022, before returning to more normalised levels in 2023. Opti- mism that the FATF grey listing might be lifted later this year is also contrib- uting to a more benign outlook for the Maltese economy. Against this background, APS Bank continues to be a safe and trusted part- ner for customers, employees, share- holders and the broader community we proudly serve. Despite the various un- certainties, we continue to grow market share, our credit quality remains strong and customer confidence in our mod- el is at its highest. In these challenging times the resilience we show is more important than ever. Notwithstanding the market volatili- ty impacting the Group, the Bank gen- erated an annualised return on capital exceeding 12% for the quarter under review. As our outlook for the coming months continues to be cautioned by the cir- cumstances around us, we enter the second quarter on top gear as we pre- pare to approach the market for new equity capital and a listing of the Bank's ordinary shares for the first time in our history. e sentiment for the Initial Public Offering is proving to be very strong and we look forward to this round of capital raising as a gateway for the next, exciting phase of APS Bank's development." APS Bank announces strong Q1 results in volatile market conditions

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