The outstanding result achieved in 2007, a year in which Melli Bank operated under very challenging conditions, provided testimony to the strength and resilience of the Bank’s core business, its strategy and the quality of its management.
Notwithstanding the necessity to redefine its business model in response to the challenges confronted, the Bank had yet another successful year. At €46.7m the underlying profit, being the profit earned before any profits from property sales (€0.7m in 2007 and €9.2m in 2006) was in line with that achieved in 2006 (€47.4m) despite an adverse movement of some 11% in the Euro/US Dollar exchange rates between those two years.
The core business of trade finance performed strongly in 2007, increasing both interest margin and fee income earned by the Bank. The changing mix of products, with a sharper focus on wider margin business, did not result in any adverse debt experience and the Bank again found it unnecessary to make any provision for non performing lending, a reflection of the prudent credit risk management of the Bank. The operating income at €59.9m (2006, €59.1m) reached a record level. Whilst the contribution from interest margin was slightly below the 2006 level, the contribution from fees and commissions showed growth of 34%.
The Bank’s response to the changes in its operating environment throughout 2007 resulted in the recognition on 31 October 2007 of a change in the functional currency from US Dollars to Euros. The Bank redenominated its share capital and changed its reporting currency accordingly at the same date.
|
|
