Issue link: https://maltatoday.uberflip.com/i/1475889
4 NEWS 11.08.2022 DURING the first six months of 2022, MeDirect continued its transforma- tion towards becoming a pan-Europe- an WealthTech leader and a specialised mortgage lender. By taking advantage of the flexibility of- fered by its technology and ability to in- novate, during the past three years Me- Direct Group has successfully executed its strategy, which is based on four pil- lars: building a world-class WealthTech platform, growing its retail franchise fo- cused on affluent customers, de-risking and diversifying its balance sheet with a focus on mortgages, and improving the efficiency of its operating model. When announcing its interim financial results for 2022, MeDirect stated that it is on track to complete the delivery of its disruptive Wealth SuperApp featuring a single, user-friendly suite of products combining innovative wealth solutions with daily banking functionalities, which will make MeDirect a one-stop-shop for its customers. "In the coming months, MeDirect will continue to strengthen its platform with the launch of online advisory and discre- tionary portfolio management services, as well as, virtual and physical cards to enhance its everyday banking offering. is unique combination of daily banking and wealth services available via both the mobile app and online banking platform is expected to be highly differentiating in the market," said Arnaud Denis, Chief Ex- ecutive Officer of MeDirect Group. In mid-2022, MeDirect revamped its brand in anticipation of the release of its new suite of products. e new brand- ing emphasises that MeDirect offers its clients the tools necessary to empower them to navigate the complexity of the financial world and makes them feel confident and in control of their financ- es. MeDirect is shifting its customers' perception of banking from "we" to "me" – my money, my choices. Another important development has been the building of a scalable special- ised mortgage lending platform in Malta, Belgium and the Netherlands. In Malta, MeDirect introduced three new products during the first half of 2022 –green home loans, 10-year fixed-rate mortgages and a home equity product. ese products were all well-received and have been gain- ing momentum in the Maltese market. MeDirect's home loan offering, which features personalised service ensures a faster and market-leading turnaround for customers financing their homes. MeDirect's Dutch government-guar- anteed (NHG) mortgage portfolio now represents approximately 40% of the Group's balance sheet. In December 2021, MeDirect launched its meHome- Loan product in the Belgian market in partnership with Allianz. In addition, MeDirect continues the steady develop- ment of its well-established Maltese cor- porate lending business to support the local economy. MeDirect's retail franchise, focused on affluent customers, grew by almost 30% over the past twelve months to more than 106,000 clients. Total client financial as- sets increased by almost 4% year over year, notwithstanding very challenging market and macroeconomic conditions, reaching €4.3 billion. Strong trust in the MeDirect brand and its award-winning onboarding process enabled MeDirect to increase its wealth client base by 19% over the past twelve months. is growth was supported by high customer satis- faction and retention levels. Success in retaining clients is demonstrated by the fact that over 90% of clients who opened accounts with MeDirect five years ago remain with the bank. Profit before tax for the period ended 30 June 2022 amounted to €2.7 million, compared to €3.2 million for the period ended 30 June 2021. Operating income grew by 7% year over year whilst im- proved market conditions led to a €3.5 million net release of loan impairment charges. Net interest income increased by 11% compared with the same period last year, from €25.8 million in 2021 to €28.7 million, while net fee and commis- sion income increased by 8% from €2.8 million in 2021 to €3.1 million. e Group's non-performing loan ratio was reduced to 4.6% as at 30 June 2022, from 6.7% in 31 December 2021. e capital and liquidity positions remained strong, supporting the continuation of MeDirect's business transformation and growth strategy. MeDirect's Tier 1 capital ratio stood at 13.6%, with a total capital ratio of 17.3% - both well above regula- tory requirements. e Group's liquidity reserves remained strong at €740 million as at 30 June 2022, and the Group's Li- quidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) stood at 247% and 129%, respectively, both well above the minimum requirements. MeDirect's mortgage portfolio in- creased by 9% over the past twelve months. As part of the Group's de-risk- ing plan, the international corporate lending portfolio was reduced by 12% to €624 million as at 30 June 2022, repre- senting less than 15% of the Group's bal- ance sheet. Environmental, Social and Governance (ESG) is an important area of focus, and the Group has integrated ESG princi- ples into its daily business. During the first half of 2022, MeDirect implement- ed a range of ESG initiatives including, amongst others, incorporating sustaina- bility principles in its credit and invest- ment businesses, launching green home loans, including a feature in its broker- age platform enabling investors to iden- tify and filter funds and ETFs which fo- cus on sustainability and providing ESG training to MeDirect's Board and em- ployees. ese efforts were validated by MeDirect's improved rating by EcoVadis, one of the top international providers of sustainability ratings. MeDirect's overall score was in the top 15% of all companies rated by EcoVadis. When commenting on the outlook for the coming months, Denis said MeDi- rect aims to continue delivering an at- tractive value proposition to its custom- ers, whilst at the same time diversifying and de-risking its balance sheet despite a challenging geopolitical and macroeco- nomic environment. MeDirect Bank continues to deliver business growth whilst investing to become a pan-European WealthTech leader BANK of Valletta has announced it will no longer be charging the high-balance fee on deposits to non-personal customers. e high-balance fee was intro- duced as a result of the negative in- terest rate scenario that was preva- lent till end of July 2022. e fee has been withdrawn from the bank's tar- iff of charges as from 1 August 2022. Albert Frendo, Chief Business Banking Officer, explained that the bank is following and adapting to the evolving environment, ensuring that the changes in market dynam- ics are reflected in its pricing and business strategy. "We are ensuring that the level of corporate deposits are sustainable and within the required parameters as reflected in our asset and liability management," he said. "Within such perspective, we make sure that any benefits re- sulting from market changes are immediately accrued to the cus- tomer, whilst effectively managing negative changes as much as pos- sible." e Bank's decision dovetails with other efforts being made in support of Maltese entrepreneurs. "Within an ensuing inflationary period, the Bank continues to ensure that it remains the key provider of commercial funding, underpinned by strong lending fundamentals and effective feasibility assessments to continue supporting sustainable economic growth in the various economic sectors that are driving the Maltese economy," Frendo said. BOV withdraws high-balance fee on deposits to non-personal customers