COMPANY ANNOUNCEMENT

The following is a Company Announcement issued by FIMBank p.l.c. ("FIMBank" or the "Bank") pursuant to the Malta Financial Services Authority Listing Rules.

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The Board of Directors of FIMBank met in London on 14 August 2018, to approve the Consolidated and the Bank's Interim Financial Statements for the six months ended 30 June 2018.

The Half-Yearly Report, drawn up in terms of the Listing Rules, is attached to this Company Announcement. The Interim Financial Statements are unaudited but independently reviewed by KPMG, the Registered Auditors.

In accordance with the requirements of the Listing Rules the Half-Yearly Report is being made publicly available for viewing on the Bank's website at www.fimbank.com.

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Andrea Batelli Company Secretary

14 August 2018

condensed interim financial statements 2018

Contents	Page
report pursuant to Listing Rule 5.75.2	2
Condensed interim financial statements:
Condensed interim statements of financial position	7
Condensed interim income statements	9
Condensed interim statements of comprehensive income	10
Condensed interim statements of changes in equity	11
Condensed interim statements of cash flows	15
Notes to the condensed interim financial statements	16
Statement pursuant to listing rule 5.75.3	36

condensed interim financial statements	37

For the six months ended 30 June 2018

isting Rules and the Prevention of Financial Markets Abuse Act, 2005. This Report, which shall be read in conjunction with the condensed interim financial statements of the Group and the Bank for the six months ended 30 June 2018, including the Notes thereto, forms part of the Half-Yearly Report of FIMBank p.l.c., drawn up in accordance with the requirements of Listing Rule 5.75.2.

group structure and principal activities

ions Limited as set out below. The lst some of its subsidiaries and branches are subject to authorisation and regulation according to the respective jurisdictions in which they operate.

A brief description of the activities in the Group follows (% shareholding follows after the name):

The Bank is a public limited company registered under the laws of Malta, and listed on the Malta Stock Exchange. It is licensed as a credit institution under the Banking Act, 1994. The Bank is principally active in providing international trade finance and to act as an intermediary to other financial institutions for international settlements, factoring and loan syndications.
LFC (100%) is registered in the United Kingdom as a private limited liability company. It was founded in 1984 and provides international trade finance services (with particular focus on forfaiting business) through an international network of offices. Some of ties include the trading of bills of exchange, promissory notes, loans, deferred payment letters of credit and the provision of other financial facilities to companies and banks.
FBS (100%), registered in Malta, has as its primary purpose the provision of information technology and support services to the Group and its associated companies.
-to-day management of the building and leasing of space for commercial purposes.
Egypt Factors (100%), registered in Egypt, is active in providing factoring and forfaiting services to Egyptian companies.
FHC (100%), registered in Chile, serves as the corporate vehicle for Latam Factors S.A. (51%), currently classified as a non-current asset held for sale, also registered in Chile, providing all types of factoring, financial leasing and other management services. The other shareholders are Inversiones El Mayorazgo Limitada, Marín y Compañía S.A., Asesoría e Inversiones CABS S.A., Compañía de Rentas Epulafquén Ltd., Compañía de Rentas Trigal Ltd. and Compañía General de Rentas Ltd.
FIMFactors associated companies. These are:
- a. India Factoring and Finance Solutions (Private) Limited (86.05%), incorporated in Mumbai, India, to carry out the business of factoring, forfaiting and trade finance activities in India, the other shareholders being Banca IFIS (5.10%), India Factoring Employee Welfare Trust (8.34%) and Blend Financial Services Limited (1%). India Factoring is regulated by the Reserve Bank of India.
- b. CIS Factors Holdings B.V. (100%), incorporated in the Netherlands which served as the holding vehicle for another factoring company, the latter currently under liquidation.
- c. Menafactors Limited (100%), incorporated in the United Arab Emirates, and holding 50% in Levant Factors S.A.L., a company registered in Lebanon. Menafactors is currently in liquidation.
- d. BrasilFactors S.A. (50%), currently classified as a non-current asset held for sale, incorporated in São Paulo, Brasil, with its core business focused on factoring services and forfaiting targeting small and medium-sized companies. The other shareholder is China

results for the year

The condensed interim financial statements have been prepared in accordance with EU adopted IAS 34 Interim Financial Reporting. These 2018 as approved by the Board of Directors on 14 August 2018.

For the six months ended 30 June 2018, the FIMBank Group posted an after-tax profit of USD6.1 million, a 47% increase to the USD4.1 million registered for the same period in 2017. The Directors do not recommend the payment of an interim dividend for the period under review.

review of performance

a sustainable platform for further success. A statement of strategic intent was made with the raising of additional equity in the amount of \$105 million in the second quarter - t growth. In parallel, the core performance has improved across the key operational pillars covering business and revenue generation, risk management and efforts have stepped up, growing client assets and demonstrating a strong pipeline of business across the different products and geographies within which it operates. As a result, core income generation has rebounded on the back of increased volumes, improved yields and lower cost of funds. Complimenting this are successful measures in managing costs, improving key cost/income ratios both in absolute and relative terms. As much as origination and business development remain a priority for the Group, the focus on asset quality and acceptable risk levels has remained critically important resulting in improved provision coverage on delinquent loans, while recovery efforts yield expected results.

FIMBank, as the parent of the Group, has led the coordination of these improvement efforts. During the period under review, the Bank allocated more resources to the origination units, with further successes in the trade and commodity financing, shipping financing and factoring as well as encouraging results in the growing real estate portfolio in Malta. The Bank has also continued optimising its funding structures, preserving its correspondent business relationships and boosting its net margins through continued evaluation of the asset/liability management processes. Provisioning for delinquent loans at FIMBank was increased to reflect prevailing recovery conditions, also impacted by the introduction of more risk-driven impairment accounting rules.

LFC had another positive term, successfully building on its business model and specialised expertise to trade its portfolio on the secondary market. Whilst LFC has faced increased competition and heightened margin compression, its ability to churn its assets has ensured adequate revenue margins and marginal cost growth. The UK subsidiary leads other businesses in sourcing third party wholesale funding, providing a diversified funding mix to the Group.

t to build a focused export factoring book is being successfully executed. The subsidiary recorded its highest level of client assets in June at attractive net revenue yields. A strong first half performance was impacted by higher impairment requirements on a non-performing loan, as recovery efforts are underway.

Egypt Factors has continued its transformation strategy following full acquisition by the Group in 2016. During the second quarter of this year the company achieved a profit break-even level returning a marginal operational profit for two consecutive months. The subsidiary has been resourced sufficiently with capital and liquidity to fully execute its business plan within the backdrop of improving local economic conditions, targeting domestic and export-oriented clients.

The Group has resolved to dispose of its investment in Latamfactors (Chile), matching a similar decision taken during the last financial year with respect to Brasilfactors (Brazil) operating models and structures are not complementary to those of FIMBank.

income statement

The results for the period under review are summarised in the table below which should be read in conjunction with the explanatory commentary that follows:

	Group
	2018	2017	Movement
	USD	USD	USD
Net interest income	13,442,515	12,780,856	661,659
Net fee and commission income	9,408,279	9,182,752	225,527
Dividend income	4,035,661	3,749,265	286,396
Net results from foreign currency operations	977,211	(1,981,136)	2,958,347
Other operating income	445,401	226,979	218,422
Net operating income	28,309,067	23,958,716	4,350,351
Operating expenses	(18,516,181)	(21,218,882)	2,702,701
Net operating results	9,792,886	2,739,834	7,053,052
Net impairment (losses)/gains)	(2,091,439)	1,760,499	(3,851,938)
Net results from trading assets and other financial instruments	1,138,786	(28,996)	1,167,782
Share of loss of equity accounted investees	238,634	(245,969)	484,603
Fair value loss on re-measurement of non-current asset held for sale	(2,078,082)	-	(2,078,082)
Profit before tax	7,000,785	4,225,368	2,775,417
Taxation	(947,712)	(101,477)	(846,235)
Profit for the period	6,053,073	4,123,891	1,929,182

For the period under review, net operating results, that is operating revenues less operating costs, more than tripled from USD2.7 million to USD9.8 million as the Group improved its revenues by USD4.4 million and reduced its costs by USD2.7 million.

T ome (net revenues) increased by 18% from USD24.0 million to USD28.3 million. Net interest income, net fees and dividend income combined together increased by 5% to USD26.8m as a result of higher gross yields and lower cost on funding sources. The focused growth in yield-rewarding asset lines as well as the churning of existing portfolio into higher yielding assets has continued during the first half. Cost of funds decreased as the Group was more selective its funding sources, in managing its asset/liability composition and also as a result of the repayment of the subordinated loan as part of the Rights Issue. In addition, net results from foreign currency operations moved back to positive territory with a USD3.0 million improvement to prior period, primarily due to a marked decrease in the use of foreign currency swaps for risk management complemented by client-driven foreign currency profits.

Operating expenses for the six months under review dropped by 13% from USD21.2 million to USD18.5 million, reflecting the deconsolidation of Latamfactors in the current period and the non-recurrence of regulatory costs booked in the prior period. These decreases were marginally offset by increases in fixed and variable pay costs as the drive to engage and retain experienced staff continues across the Group.

During the current six months, the Group has fully implemented the new impairment requirements emanating from IFRS9, which also had an impact on the opening reserves at 01 January 2018. For the current six months, the Group improved its coverage on key non-performing loans and as a result increased the specific impairments (IFRS9 Stage 3) by USD3.4 million. In 2017, the results were positively impacted by one specific account which had contributed USD3.6 million net recoveries to the Income Statement. Separately, following an improvement in the risk profile of a number of financial assets, the IFRS9 Stage 1 and Stage 2 impairment allowances decreased by USD1.3 million.

Results from trading assets and other financial instruments increased by USD1.2 million following an improvement in the market values of a number of trading assets held in the forfaiting portfolio.

Latamfactors contributed to a net share of profit (equity method) of USD0.2 million, compared to the share of loss from Brasilfactors in the comparative period. During the period ended June the Group resolved to dispose of its investment in Latamfactors and as a result a fair value loss of USD2.1 million has been recognised to account for the difference in the carrying amount of the investment and its realisable value. The investment in Brasilfactors was brought down to Nil on 31 December 2017 and as a result no further losses are to ts.

financial position

At 30 June 2018, total Consolidated Assets stood at USD1.95 billion, an increase of 19% over the USD1.64 billion reported at end-2017. The G oans and advances to customers increased by USD131 million, and wholesale lending by USD23 million. Treasury assets surged by USD108 million, attributable to changes in the minimum regulatory liquidity requirements and temporary excess liquidity. Trading assets and equity instruments increased by USD30 million and USD18 million respectively.

Total Consolidated Liabilities as at 30 June 2018 stood at USD1.67 billion, a rise of 14% over the USD1.47 billion reported at end 2017. The rise is mainly attributable to an increase in deposits from corporate and retail clients by USD226 million. Wholesale funding also increased by USD36 million. During the period, the Group repaid a USD50 million subordinated loan from Burgan Bank, which used to qualify as Tier 2 capital under CRD IV. This has been replaced by an increase in Tier 1 capital.

Group Equity as at Financial Reporting date stood at USD274 million (31 December 2017: USD173 million), with CET1 ratio standing at 16.7% and Total CAR at 17.3%. USD105 million new capital was raised following a Rights Issue of shares, which process was concluded in May 2018. Retained earnings at 1 January 2018 were impacted by an impairment recognition of USD 8.2 million on implementation of IFRS 9 (see note 4.1).

annual general meeting 2018

The Bank convened its Annual General Meeting on 9 May 2018. The Board composition following the Annual General Meeting is as follows:

John C. Grech (Chairman) Masaud M. J. Hayat (Vice Chairman) Majed Essa Al-Ajeel Mohamed Fekih Ahmed Eduardo Eguren Linsen Osama Talat Al-Ghoussein Adrian Alejandro Gostuski Rogers David LeBaron Rabih Soukarieh Edmond Brincat Hussain Lalani

related party transactions

Consistent with the 2017 Annual Report and Audited Financial Statements, the Bank maintained a related party relationship with its significant shareholders, subsidiaries, equity accounted investees, directors and executive officers. In particular, the following related party balances and/or transactions were undertaken during the period under review:

1. USD148.7 million). Accrued Interest at 30 June 2018 stood at USD3.2 million (31 December 2017: USD0.05 million). Interest earned from subsidiaries for the six months ended 30 June 2018 amounted to USD3.2 million (six months ended 30 June 2017: USD3.4 million).
1. at 30 June 2018, net of impairments, amounted to USD8.9 million (31 December 2017: USD8.9 million). Accrued Interest at 30 June 2018 stood at USD0.11 million (31 December 2017: USD0.06 million). Interest earned from Associated Companies for the six months ended 30 June 2018 amounted to USD0.22 million (six months ended 30 June 2017: USD0.22 million).
1. customers intermediate parents below the ultimate parent company of USD34.8 million (31 December 2017: USD36.0 million). Accrued Interest at 30 June 2018 stood at USD0.3 million (31 December 2017: USD0.2 million).
1. shareholders having significant influence of USD65.0 million (31 December 2017: USD95.0 million). Accrued Interest at 30 June 2018 stood at USD0.04 million (31 December 2017: USD0.9 million). Interest paid on this funding for the six months ended 30 June 2018 amounted to USD1.0 million (30 June 2017: USD1.5 million).
1. D0.5 million).
1. Dividend received from subsidiary undertakings during the six months ended June 2018 was Nil (30 June 2017: USD1.45 million).

Related party transactions with shareholders and directors were undertaken in the ordinary course of business.

Related party transactions carried out by the Bank and its subsidiaries are reported to the Audit Committee which reviews them and assesses listing rules as well as current best recommendations and practices of good corporate governance.

the second half of 2018

The performance of the Group in the first half of the year portrayed a set of key positive performance indicators across asset generation, liability management, credit quality and cost efficiencies. The approach adopted so far will continue evolving; in the months ahead the Group will exploit its strong expertise and improved operating culture to grow across its diversified product offering. The Group has been successful in turning its business around, generating profitability and providing a platform for growth over the last twelve quarters. With enhanced capital, the Group is poised to achieve its ambitious objectives for 2018 and beyond, and mark its ascendance as a Trade Finance provider of preferred choice.

Approved by the Board on 14 August 2018 and signed on its behalf by:

Chairman Vice Chairman

John C. Grech Masaud M. J. Hayat

condensed interim statements of financial position

			Group	Bank
		30 Jun 2018	31 Dec 2017	30 Jun 2018	31 Dec 2017
	Note	USD	USD	USD	USD
ASSETS
Balances with the Central Bank of Malta, Treasury Bills and cash		146,592,037	208,171,299	146,561,504	208,147,513
Trading assets		282,221,164	252,509,144	-	-
Derivative assets held for risk management	12	2,265,093	722,256	2,275,131	722,256
Loans and advances to banks		421,156,689	226,092,934	416,751,550	203,552,663
Loans and advances to customers		697,219,376	566,361,530	771,650,933	581,529,952
Investments available-for-sale		-	261,244,798	-	261,244,798
Financial assets at fair value through
other comprehensive income		102,320,989	-	102,320,989	-
Financial assets at fair value through profit or loss		174,685,732	-	174,685,732	-
Investments in subsidiaries	13	-	-	94,050,884	94,050,884
Interests in equity-accounted investees	14	-	5,561,181	-	-
Non-current assets held for sale	14	2,690,995	-	-	-
Property and equipment		29,233,890	29,660,743	1,059,952	1,035,490
Investment property		16,238,869	16,238,869	-	-
Intangible assets and goodwill		12,408,142	11,984,948	3,713,613	2,736,599
Current tax assets		2,145,088	3,306,366	-	1,052,348
Deferred tax assets		39,391,709	41,023,245	22,436,278	23,303,267
Other assets		10,713,629	12,747,974	9,705,271	9,005,794
Prepayments and accrued income		9,184,089	7,776,171	11,608,996	7,054,755
Total assets		1,948,467,491	1,643,401,458	1,756,820,833	1,393,436,319
LIABILITIES AND EQUITY
Liabilities
Derivative liabilities held for risk management	12	350,757	722,922	350,757	723,454
Amounts owed to banks		528,921,075	493,192,846	499,650,506	393,247,791
Amounts owed to customers		1,072,886,915	847,198,005	1,020,429,581	815,812,570
Debt securities in issue	15	52,396,439	54,653,654	-	-
Subordinated liabilities	16	-	50,000,000	-	50,000,000
Current tax liabilities		102,872	357,509	-	-
Deferred tax liability		3,518,684	3,518,684	-	-
Other liabilities		528,850	829,197	435,040	793,060
Accruals and deferred income		15,521,242	20,034,283	8,736,084	7,818,090
Total liabilities		1,674,226,834	1,470,507,100	1,529,601,968	1,268,394,965

Equity
Share capital	16	252,720,108	157,265,562	252,720,108	157,265,562
Share premium	16	9,278,815	173,113	9,278,815	173,113
Reserve for general banking risks		572,162	608,284	572,162	608,284
Currency translation reserve		(3,826,232)	(2,747,913)	-	-
Fair value reserve		9,411,280	9,533,453	(40,672)	81,501
Other reserve		2,841,384	2,870,270	2,681,041	2,681,041
Retained earnings/(accumulated losses)		4,875,705	6,901,064	(37,992,589)	(35,768,147)
Total equity attributable to equity holders of the Bank		275,873,222	174,603,833	227,218,865	125,041,354
Non-controlling interests		(1,632,565)	(1,709,475)	-	-
Total equity		274,240,657	172,894,358	227,218,865	125,041,354
Total liabilities and equity		1,948,467,491	1,643,401,458	1,756,820,833	1,393,436,319

condensed interim statements of financial position

		Group		Bank
		30 Jun 2018	31 Dec 2017	30 Jun 2018	31 Dec 2017
MEMORANDUM ITMES	Note	USD	USD	USD	USD
Contingent liabilities	17	3,282,900	1,186,426	50,090,509	57,601,096
Commitments	18	276,218,250	353,893,273	224,775,166	254,253,843

These condensed interim statements were approved by the Board of Directors and authorised for issue on 14 August 2018 and signed on its behalf by:

John C. Grech Masaud M. J. Hayat Chairman Vice Chairman

condensed interim income statements

For the six months ended 30 June 2018

		Group			Bank
		2018	2017	2018	2017
	Note	USD	USD	USD	USD
Interest income		26,246,124	26,458,792	17,105,569	15,385,578
Interest expense		(12,803,609)	(13,677,936)	(9,541,003)	(9,829,342)
Net interest income		13,442,515	12,780,856	7,564,566	5,556,236
Fee and commission income		11,618,863	11,646,747	6,961,966	5,056,862
Fee and commission expense		(2,210,584)	(2,463,995)	(1,223,778)	(1,129,381)
Net fee and commission income		9,408,279	9,182,752	5,738,188	3,927,481
Net trading results	9	2,115,997	(2,010,132)	3,082,709	(1,941,213)
Dividend income	10	4,035,661	3,749,265	4,035,661	5,197,666
Other operating income		445,401	226,979	62,299	2,138
Operating income before net impairment (losses)/gains		29,447,853	23,929,720	20,483,423	12,742,308
Net impairment (losses)/gains on financial assets		(2,091,439)	1,760,499	(5,504,002)	1,706,698
Operating income		27,356,414	25,690,219	14,979,421	14,449,006
Administrative expenses		(17,527,378)	(19,987,494)	(12,038,565)	(11,390,218)
Depreciation and amortisation		(988,803)	(1,231,388)	(484,043)	(429,405)
Total operating expenses		(18,516,181)	(21,218,882)	(12,522,608)	(11,819,623)
Operating profit		8,840,233	4,471,337	2,456,813	2,629,383
Share of results of equity accounted investees (net of tax)		238,634	(245,969)	-	-
Fair value loss on re-measurement of non-current asset held for sale	14	(2,078,082)	-	-	-
Profit before income tax		7,000,785	4,225,368	2,456,813	2,629,383
Taxation	11	(947,712)	(101,477)	(791,025)	(4,564)
Profit for the period		6,053,073	4,123,891	1,665,788	2,624,819
Attributable to:
Equity holders of the bank		6,043,385	4,062,284	1,665,788	2,624,819
Non-controlling interests		9,688	61,607	-	-
Profit for the period		6,053,073	4,123,891	1,665,788	2,624,819
Earnings per share
Basic earnings per share (US cents)		1.59	0.81	0.44	0.52
Diluted earnings per share (US cents)		1.59	0.81	0.44	0.52

condensed interim statements of comprehensive income

For the six months ended 30 June 2018

	Group		Bank
	2018	2017	2018	2017
	USD	USD	USD	USD
Profit for the period	6,053,073	4,123,891	1,665,788	2,624,819
Other comprehensive income:
Items that are, or may be, reclassified subsequently to profit or loss
Foreign operations - foreign currency translation differences	(1,078,319)	1,868,436	-	-
Fair value reserve (available-for-sale financial assets), net of deferred tax	-	739,050	-	739,050
Fair value reserve change in fair value and impairment of financial assets	(70,833)	-	(70,833)	-
Total comprehensive income for the period	4,903,921	6,731,377	1,594,955	3,363,869

For the six months ended 30 June 2018

Group

	Attributable to equity shareholders of the Bank
	Share capital USD	Share premium USD	Reserve for general banking risks USD	Currency translation reserve USD	Fair value reserve USD	Other reserve USD	Retained earnings USD	Total USD	Non controlling interests USD	Total equity USD
At 31 December 2017	157,265,562	173,113	608,284	(2,747,913)	9,533,453	2,870,270	6,901,064	174,603,833	(1,709,475)	172,894,358
Adjustment on initial application of IFRS 9	-	-	-	-	(41,948)	-	(8,133,752)	(8,175,700)	(68,814)	(8,244,514)
Adjusted balance at 1 January 2018	157,265,562	173,113	608,284	(2,747,913)	9,491,505	2,870,270	(1,232,688)	166,428,133	(1,778,289)	164,649,844
Total comprehensive income Comprehensive income for the period Profit for the period	-	-	-	-	-	-	6,043,385	6,043,385	9,688	6,053,073
Other comprehensive income Change in fair value of financial assets Impairment of financial assets Currency translation reserve	- - -	- - -	- - -	- - (1,078,319)	(70,833) (9,392) -	- - -	- - -	(70,833) (9,392) (1,078,319)	- - 136,036	(70,833) (9,392) (942,283)
Total comprehensive income for the period	-	-	-	(1,078,319)	(80,225)	-	6,043,385	4,884,841	145,724	5,030,565
Transactions with owners of the Bank Contributions and distributions Issue of new shares, net of transaction costs	95,454,546	9,105,702	-	-	-	-	-	104,560,248	-	104,560,248
Total transactions with owners of the Bank	95,454,546	9,105,702	-	-	-	-	-	104,560,248	-	104,560,248
Transfer between reserves	-	-	(36,122)	-	-	(28,886)	65,008	-	-	-
At 30 June 2018	252,720,108	9,278,815	572,162	(3,826,232)	9,411,280	2,841,384	4,875,705	275,873,222	( 1,632,565)	274,240,657

The equity position as at 1 January 2018 has been adjusted as disclosed in Note 4.1.

For the six months ended 30 June 2018

Group

	Attributable to equity shareholders of the Bank
	Share capital USD	Share premium USD	Reserve for general banking risks USD	Currency translation reserve USD	Fair value reserve USD	Other reserve USD	(Accumulated losses)/ retained earnings USD	Total USD	Non controlling interests USD	Total equity USD
At 1 January 2017	155,239,263	2,101,335	764,792	(6,715,522)	951,740	2,481,760	(386,566)	154,436,802	23,274,085	177,710,887
Total comprehensive income Comprehensive income for the period Profit for the period	-	-	-	-	-	-	4,062,284	4,062,284	61,607	4,123,891
Other comprehensive income Change in fair value of available-for-sale assets Currency translation reserve	- -	- -	- -	- 1,868,436	739,050 -	- -	- -	739,050 1,868,436	- 15,511	739,050 1,883,947
Total comprehensive income for the period	-	-	-	1,868,436	739,050	-	4,062,284	6,669,770	77,118	6,746,888
Transactions with owners of the Bank Contributions and distributions Bonus issue of shares Exercised share options	1,941,232 58,893	(1,941,232) 10,637	- -	- -	- -	- -	- -	- 69,530	- -	- 69,530
Total transactions with owners of the Bank	2,000,125	(1,930,595)	-	-	-	-	-	69,530	-	69,530
Transfer between reserves	-	-	(300,762)	-	-	383,170	(82,408)	-	-	-
At 30 June 2017	157,239,388	170,740	464,030	(4,847,086)	1,690,790	2,864,930	3,593,310	161,176,102	23,351,203	184,527,305

For the six months ended 30 June 2018

Bank

	Share capital USD	Share premium USD	Reserve for general banking risks USD	Fair value reserve USD	Other reserve USD	Accumulated losses USD	Total USD
At 31 December 2017	157,265,562	173,113	608,284	81,501	2,681,041	(35,768,147)	125,041,354
Adjustment on initial application of IFRS 9	-	-	-	(41,948)	-	(3,926,352)	(3,968,300)
Adjusted balance at 1 January 2018	157,265,562	173,113	608,284	39,553	2,681,041	(39,694,499)	121,073,054
Total comprehensive income Total comprehensive income for the period Profit for the period	-	-	-	-	-	1,665,788	1,665,788
Other comprehensive income Change in fair value of financial assets Impairment of financial assets	- -	- -	- -	(70,833) (9,392)	- -	- -	(70,833) (9,392)
Total comprehensive income for the period	-	-	-	(80,225)	-	1,665,788	1,585,563
Transactions with owners of the Bank Contributions and distributions Issue of new shares, net of transaction costs	95,454,546	9,105,702	-	-	-	-	104,560,248
Total transactions with owners of the bank	95,454,546	9,105,702	-	-	-	-	104,560,248
Transfer between reserves
Transfer to reserve for general banking risks	-	-	(36,122)	-	-	36,122	-
At 30 June 2018	252,720,108	9,278,815	572,162	(40,672)	2,681,041	(37,992,589)	227,218,865

The equity position as at 1 January 2018 has been adjusted as disclosed in Note 4.1.

For the six months ended 30 June 2018

Bank

	Share capital USD	Share premium USD	Reserve for general banking risks USD	Fair value reserve USD	Other reserve USD	Accumulated losses USD	Total USD
At 1 January 2017	155,239,263	2,101,335	764,792	(1,891,140)	2,681,041	(36,040,473)	122,854,818
Total comprehensive income Total comprehensive income for the period Profit for the period	-	-	-	-	-	2,624,819	2,624,819
Other comprehensive income Change in fair value of available-for-sale assets	-	-	-	739,050	-	-	739,050
Total comprehensive income for the period	-	-	-	739,050	-	2,624,819	3,363,869
Transactions with owners of the Bank Contributions and distributions Bonus issue of shares Exercised share options	1,941,232 58,893	(1,941,232) 10,637	- -	- -	- -	- -	- 69,530
Total transactions with owners of the bank	2,000,125	(1,930,595)	-	-	-	-	69,530
Transfer between reserves	-	-	(300,762)	-	-	300,762	-
At 30 June 2017	157,239,388	170,740	464,030	(1,152,090)	2,681,041	(33,114,892)	126,288,217

condensed interim statements of cash flows

For the six months ended 30 June 2018

2018 2017 2018 2017 USD USD USD USD Cash flows from operating activities Interest and commission receipts 38,242,117 40,236,561 20,568,377 18,741,506 Exchange (paid)/received 74,191 (3,386,784) 2,570,887 (4,207,496) Interest and commission payments (16,042,190) (15,532,541) (11,548,910) (10,255,541) Payments to employees and suppliers (17,019,517) (18,357,994) (9,683,153) (9,818,333) Operating profit/(loss) before changes in operating assets / liabilities 5,254,601 2,959,242 1,907,201 (5,539,864) (Increase)/decrease in operating assets: - Trading assets and financial assets at fair value through profit or loss (32,279,397) 108,535,834 - - - Loans and advances to customers and banks (137,661,051) 94,637,048 (123,544,863) 99,634,588 - Other assets 4,030,725 (2,977,018) (699,477) (938,572) Increase/(decrease) in operating liabilities: - Amounts owed to customers and banks 83,800,571 (82,551,923) 152,645,951 (178,858,700) - Other liabilities (300,342) (265,776) (379,922) (24,697) - Net advances from/(to) subsidiary companies - - (89,250,686) 100,986,251 Net cash generated from operating activities before income tax (77,154,893) 120,337,407 (59,321,796) 15,259,006 Income tax refunded/(paid) (536,369) 384,654 994,306 (4,564) Net cash flows from operating activities (77,691,262) 120,722,061 (58,327,490) 15,254,442 Cash flows from investing activities - Payments to acquire property and equipment (229,141) (783,016) (229,142) (160,322) - Payments to acquire intangible assets (1,277,263) (584,591) (1,256,376) (615,036) - Payments to acquire shares in subsidiary companies - - - (10,000,000) - Payments to acquire shares in other investments (18,035,210) - (18,035,210) - - Proceeds from disposal of available-for-sale financial assets - 8,871,894 - 8,871,894 - Proceeds on disposal of financial assets at FV through P&L - 17,870,000 - 17,870,000 - Proceeds on disposal of sale of property and equipment - 1,174 - - - Net investment in discontinued operations - - - - - Receipt of dividend 3,062,050 3,873,571 3,062,050 5,321,972 Net cash flows from/(used in) investing activities (16,479,564) 29,249,032 (16,458,678) 21,288,508 Cash flows from financing activities - Proceeds from issue of share capital 54,560,248 69,529 54,560,248 69,529 - Net movement in debt securities (2,257,214) 34,303,383 - 35,000,000 - Share issue costs - - - - Net cash flows from/(used in) financing activities 52,303,034 34,372,912 54,560,248 35,069,529 Increase/(decrease) in cash and cash equivalents (41,867,792) 184,344,005 (20,225,920) 71,612,479 Analysed as follows: - Effect of exchange rate changes on cash and cash equivalents (10,072,880) (15,607,227) (8,811,586) (7,480,889) - Net increase in cash and cash equivalents (31,794,912) 199,951,232 (11,414,334) 79,093,368 Increase in cash and cash equivalents (41,867,792) 184,344,005 (20,225,920) 71,612,479 Cash and cash equivalents at beginning of period 178,676,622 35,550,126 153,393,147 43,676,465 Cash and cash equivalents at end of period 136,808,830 219,894,131 133,167,227 115,288,944	Group		Bank

notes to the condensed interim financial statements

For the six months ended 30 June 2018

1 reporting entity

institution domiciled in Malta with its registered address at Mercury Tower, The Exchange Financial and at and for the six months ended 30 June 2018 ).

The financial statements of the Group as at, and for the year ended, 31 December 2017 office and are available for viewing on its website at www.fimbank.com.

2 basis of accounting

The condensed interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, adopted by the EU. The interim financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of FIMBank p.l.c. as at and for the year ended 31 December 2017.

The condensed interim financial statements were approved by the Board of Directors on 14 August 2018.

3 significant accounting policies

Except for changes resulting from the adoption of IFRS 9, Financial Instruments (IFRS 9) (see Note 4.1), the significant accounting policies applied by the Group in these condensed interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2017.

3.1 standards issued but not yet effective

IFRS 16 Leases

IFRS 16 replaces existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15® Operating Leases Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

The standard is effective for annual periods beginning on or after 1 January 2019. Early adoption is permitted.

IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard i.e. lessors continue to classify leases as finance or operating leases.

The Group is currently undertaking an initial assessment of the potential impact on its consolidated financial statements. The actual impact of applying IFRS 16 on the financial statements in the period of initial application will depend on future economic conditions, b f whether it will exercise any lease renewal options and the extent to which the Group chooses to use practical expedients and recognition exemptions.

Thus far, the most significant impact identified is that the Group will recognise new assets and liabilities for its operating leases of use of offices. future minimum lease payments under non-cancellable operating leases amounted to USD2.3 million, on an undiscounted basis. In addition, the nature of expenses related to those leases will now change because IFRS 16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities.

The Group is not required to make any adjustments for leases in which it is a lessor except where it is an intermediate lessor in a sub-lease.

4 changes in accounting policies

4.1 IFRS 9 financial instruments

IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.

The following table summarises the impact, net of tax, of transition to IFRS 9 on the opening balance of reserves, retained earnings and NCI (for a description of the transition method, see 4.1.3 below).

	Impact of
	adopting IFRS9 on
	opening balance
	USD
Retained earnings
Recognition of expected credit losses under IFRS9	(7,356,661)
Share of transition adjustments from equity accounted investees	(777,091)
Impact at 1 January 2018	(8,133,752)
Fair value reserve
Recognition of expected credit losses under IFRS9	(41,948)
Impact at 1 January 2018	(41,948)
Non-controlling interests
Recognition of expected credit losses under IFRS9	(68,814)
Impact at 1 January 2018	(68,814)

The details of new significant accounting policies and the nature and effect of the changes to previous accounting policies are set out below.

4.1.1 classification and measurement of financial assets and financial liabilities

IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities. However, it eliminates the previous IAS 39 categories for financial assets of -to- -for-

lated to financial liabilities and derivative financial instruments. The impact of IFRS 9 on the classification and measurement of financial assets is set out below.

Under IFRS 9, on initial recognition, a financial asset is classified as measured at:

amortised cost;
fair value through Other Comprehensive Income (FVOCI) debt investment;
fair value through Other Comprehensive Income (FVOCI) equity investment; or
fair value through Profit or Loss (FVTPL).

The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification.

it is held within a business model whose objective is to hold assets to collect contractual cash
principal and interest on the principal amount outstanding.
it is held within a business model whose objective is achieved by both collecting contractual
its principal and interest on the principal amount outstanding.

-for- elect to present subsequent changes in an investment-by-investment basis.

. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be gnificantly reduces an accounting mismatch that would otherwise arise.

A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.

The following accounting policies apply to the subsequent measurement of financial assets.

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI	These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognised asincome in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

The effect of adopting IFRS 9 on the carrying amounts of financial assets at 1 January 2018 relates solely to the new impairment requirements, as described further below.

The following table and the accompanying notes below explain the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the financial assets as at 1 January 2018.

	Note	Original classification under IAS 39	New classification under IFRS 9	Original carrying amount under IAS 39 USD	New carrying amount under IFRS 9 USD
Balances with Central Bank of Malta, treasury bills and cash	(a)	Loans and receivables	Amortised cost	208,171,299	208,017,490
Trading assets		Held-for-trading	Mandatorily at FVTPL	252,509,144	252,509,144
Derivative assets		Held-for-trading	Mandatorily at FVTPL	722,256	722,256
Loans and advances to banks and customers	(a)	Loans and receivables	Amortised cost	792,454,464	785,384,395
Debt securities	(b)	Available-for-sale	FVOCI debt instrument	104,592,448	104,550,500
Equity securities	(c)	Available-for-sale	FVOCI equity instrument	40,314	40,314
Equity securities	(d)	Available-for-sale	Mandatorily at FVTPL	156,612,036	156,612,036
Other receivables	(a)	Loans and receivables	Amortised cost	355,079,699	354,878,102
Total financial assets				1,870,181,660	1,862,714,237

a) Loans and advances, Central Bank of Malta balances, Treasury Bills, Cash and Cash Equivalents and Other receivables that were classified USD7,425,475 in the allowance for impairment over these instruments was recognised in opening retained earnings at 1 January 2018 on transition to IFRS 9.
b) The debt securities categorised as available-for- t in a separate portfolio mainly to support regulatory liquidity requirements. The securities provide interest income but may be sold to meetliquidity requirements arising in the normal course of business. The Group considers that these securities are held within a business model whose objective is achieved tractual terms of these financial assets give rise on specified dates to ca amount outstanding. These assets have therefore been classified as financial assets at FVOCI under IFRS 9. On transition to IFRS 9, an allowance for impairment of USD41,948 was recognised as a decrease in opening retaining earnings and an increase in fair value reserves at 1 January 2018.
c) These equity securities represent investments that the Group intends to hold for the long term for strategic purposes. As permitted by IFRS 9, the Group has designated these investments at the date of initial application as measured at FVOCI. Unlike IAS 39, the accumulated fair value reserve related to these investments will never be reclassified to profit or loss.
d) Under IAS 39, these securities representing units in investment funds were designated as at FVOCI. However, under IFRS9 only ese instruments do not meet this definition, these assets have been classified as mandatorily measured at FVTPL under IFRS 9.

4.1.2 impairment of financial assets

ies to financial assets and commitments measured at amortised cost, and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognised earlier than under IAS 39.

The financial assets and commitments at amortised cost consist of loans and advances to banks and customer, balances with Central Bank of Malta, Treasury Bills and cash, other receivables, loan commitments and financial guarantees.

Under IFRS 9, loss allowances are measured on either of the following bases:

12-month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; and
lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.

The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured as 12-month ECLs:

assets for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition; and
debt securities that are determined to have low credit risk at the reporting date;

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Gr forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. Credit risk on a financial asset is also considered to have increased if its credit rating assigned by independent credit rating agencies deteriorates. Other quantitative and qualitative information is also taken into consideration in determining whether to apply a manual downgrade in the internal rating.

The Group considers a financial asset to be in default when:

the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or
the financial asset is more than 90 days past due.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference

ECLs are discounted at the effective interest rate of the financial asset.

credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A -imp asset have occurred.

presentation of impairment

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is recognised in OCI, instead of reducing the carrying amount of the asset.

impact of the new impairment model

For assets in the scope of the IFRS 9 impairment model, impairment losses are generally expected to increase and become more volatile. The irment allowance as follows.

	USD
Loss allowance at 31 December 2017 under IAS 39	43,911,866
Additional impairment recognised at 1 January 2018 on:
Balances with Central Bank of Malta, Treasury Bills and Cash at 31 December 2017	153,808
Loans and advances to banks and customers at 31 December 2017	7,070,070
Debt securities at 31 December 2017	41,948
Unfunded financial assets at 31 December 2017	201,597
Loss allowance at 1 January 2018 under IFRS 9	51,379,289

The following analysis provides further detail about the calculation of ECLs on the adoption of IFRS 9. The Group considers the model and some of the assumptions used in calculating these ECLs as key sources of estimation uncertainty.

The Group performed the calculation of ECL rates separately for wholesale customers and other customers.

The Group uses three scenarios in order to derive a weighted-average ECL, being: adverse, baseline and rebound using a 30%-40%-30% weight respectively.

ECL is derived by considering the probability of defaults (PD), loss-given default (LGD), exposure at default (EAD) and also the effective interest rate (EIR). The Group has implemented a suite of specialised risk measurement tools to be able to generate the necessary risk and financial metrics to measure impairment under IFRS9, namely:

LGDs;
Macroeconomic variables used to condition PD curves; and
Scenario-weighted ECLs.

The following table provides information about the exposure to credit risk and ECLs as at 1 January 2018.

Internal rating for impairment calculation	Equivalent to Moodys credit rating	Weighted average loss rate %	Gross carrying amount USD	Impairment loss allowance USD	Credit impaired
Grades 1 to 4- (low risk)	Baa3 to Aaa	0%	572,640,486	387,576	No
Grades 5+ to 5- (fair risk)	Ba1 to Ba3	0%	324,458,800	233,112	No
Grades 6+ to 7 (substandard)	B1 to Caa2	1%	481,789,836	3,044,952	No
Grades 7- to 8- (doubtful)	Ca to Caa3	11%	64,333,215	7,371,740	No
Grades 9 to 10 (loss)	Default	66%	60,944,924	40,341,909	Yes
			1,504,167,261	51,379,289

4.1.3 transition

Changes in accounting policies resulting from the adoption of IFRS 9 have been applied retrospectively, except as described below.

The Group has taken an exemption not to restate comparative information for prior periods with respect to classification and measurement (including impairment) requirements. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 are recognised in retained earnings and reserves as at 1 January 2018. Accordingly, the information IFRS 9 but rather those of IAS 39.
The following assessments have been made on the basis of the facts and circumstances that existed at the date of initial application.
- The determination of the business model within which a financial asset is held.
- The designation and revocation of previous designations of certain financial assets and financial liabilities as measured at FVTPL.
- The designation of certain investments in equity instruments not held for trading as at FVOCI.
If an investment in a debt security had low credit risk at the date of initial application of IFRS 9, then the Group has assumed that the credit risk on the asset had not increased significantly since its initial recognition.
All hedging relationships designated under IAS 39 at 31 December 2017 met the criteria for hedge accounting under IFRS 9 at 1 January 2018 and are therefore regarded as continuing hedging relationships.

4.2 property and equipment and investment property measurement

During the financial year ended 31 December 2017, the Group changed its accounting policy on the measurement of owned property classified s accumulated depreciation and any accumulated impairment losses. Following the change in accounting policy, the property is being measured at fair value. This change in accounting policy is being adopted as the recognition of the fair value of owned property provides a more relevant measurement approach to the Group.

r value model is measured as a revaluation under IAS rising on the revaluation is recognised in Other Comprehensive Income whilst a deficit is recognised in the Income Statement, in both cases to the extent that the surplus or deficit does not reverse the impact of a previous revaluation in either Other Comprehensive Income or Income Statement respectively. The comparative financial statements are not restated to adjust for this revaluation.

the fair value model is measured under IAS this change retrospectively by restating the opening balance of assets, liabilities and equity of the earliest prior period presented in these financial statements.

5 use of judgements and estimates

The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgments made by management in app policies and the key sources of estimation uncertainty were the same as those applied to the financial statements as at and for the year ended 31 December 2017; except for new significant judgements and key sources of estimation uncertainty related to the application of IFRS 9, which is described in Note 4.1.

6 operating segments

The Group identified five significant reportable segments: Trade Finance, Forfaiting, Factoring, Treasury and Real Estate, which are represented by different Group entities. For each of the entities, Executive Management reviews internal management reports on a monthly basis.

information about operating segments

Group - June 2018 USD

	Trade				Real
	Finance	Forfaiting	Factoring	Treasury	Estate	Other	Total
External revenue:
Interest income	8,819,789	7,421,664	7,753,272	891,693	1,326,714	32,992	26,246,124
Fee and commission income	5,307,891	3,075,616	2,796,520	-	424,929	13,907	11,618,863
Trading income	-	1,090,984	146,865	917,593	-	(39,445)	2,115,997

	14,127,680	11,588,264	10,696,657	1,809,286	1,751,643	7,454	39,980,984

Intersegment revenue:
Interest income	-	-	3,225,017	-	-	-	3,225,017
Fee and commission income	3,149	-	-	-	-	-	3,149

	3,149	-	3,225,017	-	-	-	3,228,166

Reportable segment profit/(loss)
before income tax	189,195	4,304,327	2,771,760	(3,201,864)	1,727,589	176,598	5,967,605

Group June 2017 USD

	Trade				Real
	Finance	Forfaiting	Factoring	Treasury	Estate	Other	Total
External revenue:
Interest income	8,909,154	7,295,692	8,854,169	949,117	447,636	3,024	26,458,792
Fee and commission income	3,983,028	4,957,291	2,435,210	-	201,677	69,541	11,646,747
Trading income	-	(147,405)	200,141	(17,682,289)	-	(86,618)	(17,716,171)

	12,892,182	12,105,578	11,489,520	(16,733,172)	649,313	(14,053)	20,389,368

Intersegment revenue:
Interest income	-	2,242,375	681,524	-	-	557,880	3,481,779
Fee and commission income	4,288	60	11,992	-	-	54	16,394

	4,288	2,242,435	693,516	-	-	557,934	3,498,173

Reportable segment profit/(loss)
before income tax	2,091,565	4,686,621	126,119	(5,158,997)	649,313	(518,039)	1,876,582

Group - June 2018 USD

Trade Finance	Forfaiting	Factoring	Treasury	Real Estate	Other	Total
609,297,552	291,629,352	331,538,248	593,651,963	55,061,963	60,662,514	1,941,841,592
1,151,164,858	68,210,832	121,478,696	331,584,327	-	4,020,850	1,676,459,563


Trade Finance	Forfaiting	Factoring	Treasury	Real Estate	Other	Total
488,893,079	270,236,931	309,580,788	457,847,454	46,077,650	60,991,095	1,633,626,997
949,218,817	143,614,796	107,326,078	276,509,439	-	5,476,313	1,482,145,443

reconciliation of reportable segment profit or loss

Group
	2018	2017
	USD	USD
Total profit or loss for reportable segments	5,791,007	2,394,621
Other profit or loss	176,598	(518,039)
	5,967,605	1,876,582
Share of loss of equity accounted investees	238,634	(245,969)
Fair value loss on re-measurement of non-current asset held for sale	(2,078,082)	-
Effect of other consolidation adjustments on segment results	2,872,628	2,594,755
Consolidated profit before income tax	7,000,785	4,225,368

7 fair values of financial instruments

7.1 valuation of financial instruments

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

Level 1: inputs that are quoted market prices (unadjusted) in active markets for identical instruments.
Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data.
Level 3: inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unob instruments that are valued based on quoted prices for similar instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Valuation techniques include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist, and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other premia used in estimating discount rates, bond and equity prices, foreign currency exchange rates, and expected price volatilities and correlations.

The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

The Group uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, like interest rate and currency swaps that use only observable market data and require little management judgement and estimation. Observable prices and model inputs are usually available in the market for listed debt securities and exchange traded derivatives and simple over the counter derivatives like currency rate swaps. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets.

For more complex instruments, the Group uses proprietary valuation models, which are usually developed from recognised valuation models. Some or all of the significant inputs into these models may not be observable in the market, and are derived from market prices or rates or are estimated based on assumptions. Example of instruments involving significant unobservable inputs include certain over-the-counter structured derivatives and certain loans and securities for which there is no active market. Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial instrument being valued, determination of probability of counterparty default and prepayments and selection of appropriate discount rates.

Fair value estimates obtained from models are adjusted for any other factors, such as liquidity risk or model uncertainties, to the extent that the Group believes that a third party market participant would take them into account in pricing a transaction. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Group entity and the counterparty where appropriate.

The Group has an established control framework with Chief Financial Officer and Executive Management having overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values. -Liabilities Committee and all valuations of financial instruments are reported to the Committee for review and approval. Significant valuation issues are reported to the

7.2 financial instruments measured at fair value fair value hierarchy

The table below analyses financial instruments measured at fair value, by the level in the fair value hierarchy into which the fair value measurement is categorised:

Group - 30 June 2018
----------------------

	Level 1	Level 2	Level 3	Total
	USD	USD	USD	USD

Trading assets	-	-	282,221,164	282,221,164
Derivative assets held for risk management	-	2,265,093	-	2,265,093
Financial assets at FVTPL	-	159,703,723	14,982,009	174,685,732
Financial assets at FVOCI	102,245,465	75,524	-	102,320,989
Investment property	-	-	16,238,869	16,238,869
	102,245,465	162,044,340	313,442,042	577,731,847


Derivative liabilities held for risk management	-	350,757	-	350,757
	-	350,757	-	350,757

Group - 31 December 2017
	Level 1	Level 2	Level 3	Total
	USD	USD	USD	USD

Trading assets	-	-	252,509,144	252,509,144
Derivative assets held for risk management	-	722,256	-	722,256
Investments available-for-sale	104,592,448	141,659,778	14,992,572	261,244,798
Investment property	-	-	16,238,869	16,238,869
	104,592,448	142,382,034	283,740,585	530,715,067
Derivative liabilities held for risk management	-	722,922	-	722,922
	-	722,922	-	722,922


Bank - 30 June 2018
	Level 1 USD	Level 2 USD	Level 3 USD	Total USD

Derivative assets held for risk management	-	2,275,131	-	2,275,131
Financial assets at FVTPL	-	159,703,723	14,982,009	174,685,732
Financial assets at FVOCI	102,245,465	75,524	-	102,320,989
	102,245,465	162,054,378	14,982,009	279,281,852
Derivative liabilities held for risk management	-	350,757	-	350,757
	-	350,757	-	350,757


Bank - 31 December 2017	Level 1	Level 2	Level 3	Total
	USD	USD	USD	USD

Derivative assets held for risk management	-	722,256	-	722,256
Investments available-for-sale	104,592,448	141,659,778	14,992,572	261,244,798
	104,592,448	142,382,034	14,992,572	261,967,054
Derivative liabilities held for risk management	-	723,454	-	723,454
	-	723,454	-	723,454

7.3 level 3 fair value measurements

7.3.1 reconciliation

The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy:

Group 30 June 2018

	Financial assets at
	Trading assets	FVTPL	Total
	USD	USD	USD
Balance at 1 January 2018	252,509,144	14,992,572	267,501,716
Total gains and losses in profit or loss	944,189	-	944,189
Purchases	194,135,160	-	194,135,160
Settlements	(163,499,274)	-	(163,499,274)
Net fair value movement	-	(10,563)	(10,563)
Effects of movement in exchange rates	(1,868,055)	-	(1,868,055)
Balance at 30 June 2018	282,221,164	14,982,009	297,203,173

Total gains or losses for the period in the above table are presented in the income statements and other comprehensive income as follows:

		Financial assets at
	Trading assets	FVTPL	Total
	USD	USD	USD
Total gains and losses in profit or loss
- Net trading results	(923,866)	-	(923,866)
- Net change in fair value	-	(10,563)	(10,563)

Group 31 December 2017

	Trading assets USD	Financial assets designated at fair value through profit or loss USD	Investments available-for-sale USD	Total USD
Balance at 1 January 2017 Total gains and losses in profit or loss Total gains and losses in other comprehensive income Purchases Settlements Effects of movement in exchange rates	379,397,964 13,713,784 - 474,850,009 (615,452,613) -	17,799,900 70,100 - - (17,870,000) -	5,575,795 - (130,334) 8,326,680 - 1,220,431	402,773,659 13,783,884 (130,334) 483,176,689 (633,322,613) 1,220,431
Balance at 31 December 2017	252,509,144	-	14,992,572	267,501,716

Total gains or losses for the year in the above table are presented in the income statements and other comprehensive income as follows:

	Trading assets	Financial assets designated at fair value through profit or loss	Investments available-for-sale	Total
	USD	USD	USD	USD
Total gains and losses in profit or loss
- Net trading results	13,713,784	-	-	13,713,784
- Net gain from other financial instruments carried at fair value	-	70,100	-	70,100
Total gains and losses in other comprehensive income - Net change in fair value of available-for-sale financial assets	-	-	(130,334)	(130,334)

Bank 30 June 2018	Financial assets at FVTPL USD	Total USD
Balance at 1 January 2018 Net fair value movement	14,992,572 (10,563)	14,992,572 (10,563)
Balance at 30 June 2018	14,982,009	14,982,009

Total gains or losses for the period in the above table are presented in the income statements and other comprehensive income as follows:

	Financial assets at
	FVTPL	Total
	USD	USD
- Net change in fair value	(10,563)	(10,563)

Bank 31 December 2017

Financial assets designated at fair
		Total
USD	USD	USD
		23,375,695
		70,100
		(130,334)
		8,326,680
		(17,870,000)
-	1,220,431	1,220,431
-	14,992,572	14,992,572
	value through profit or loss 17,799,900 70,100 - - (17,870,000)	Investments available-for-sale 5,575,795 - (130,334) 8,326,680 -

Total gains or losses for the year in the above table are presented in the income statements and other comprehensive income as follows:

	Financial assets designated at fair value through profit or loss	Investments available-for-sale	Total
	USD	USD	USD
Total gains and losses in profit or loss - Net gain from other financial instruments carried at fair value	70,100	-	70,100
Total gains and losses in other comprehensive income - Net change in fair value of available-for-sale financial assets	-	(130,334)	(130,334)

7.3.2 unobservable inputs used in measuring fair value

The below sets out information about valuation techniques used in measuring Level 2 and Level 3 fair values at 30 June 2018 and 31 December 2017 as well as the significant unobservable inputs used.

trading assets

The trading assets portfolio represent Forfaiting Assets, that is the discounting of receivables generated from an export contract on a without recourse basis. The assets would be evidenced by a number of different debt instruments including Bills of Exchange, Promissory Notes, Letters of Credit and trade or project related Syndicated and Bi-lateral Loan (Financing) Agreements.

The Group establishes fair value of its trading assets using a valuation technique based on the discounted expected future principal and interest cash flows. The discount rate is an estimate based on current expected credit margin spreads and interest rates at the reporting date. Inputs to valuation technique reasonably represent market expectation and measures of risk-return factors inherent in the financial instrument.

The Group uses the LIBOR yield curve as of each reporting date plus an adequate credit margin spread to discount the trading assets held. At 30 June 2018, the interest rates used range between 0% and 12.54% (31 Dec 2017: between 0.54% and 12.02%).

The effect of an estimated general increase of one percentage point in interest rate on trading assets at 30 June 2018 profit before tax by approximately USD430,295 (31 Dec 2017: USD282,068).

derivative assets and liabilities

Derivative assets and liabilities comprise Foreign-exchange forward contracts and interest-rate future contracts, classified as held for risk management. The forward contracts are over-the-counter derivatives whilst the interest-rate futures are traded on appropriate exchanges.

The Group establishes the fair value of:

i) forward foreign-exchange contracts by reference to forward exchange rates published by financial information agencies on each valuation date;
ii) interest rate futures by reference to independent valuations provided by portfolio custodians.

No significant unobservable inputs are used in valuing the derivative assets and liabilities.

financial assets at FVTPL

Financial assets at FVTPL mainly represent holdings in an unlisted sub-fund of a collective investment scheme whose underlying investments would be classified as Level 3 assets. These assets were previously classified as available-for-sale in accordance with IAS39. The sub-fund, independently run by a licensed investment manager, invests in sustainable energy plants with returns generated throughout the life of each plant.

The fair value is measured by the Group based on periodical net-asset- ndependent administrator. The subthere is no observable price, the assets are marked in accordance with best market practise. This may involve the use of models and forward projections. Inputs and assumptions used in these models may be subjective and could include a number of highly judgemental assertions.

The effect of a ten percentage point increase/(decrease) in the net asset value of the sub-fund at 30 June 2018 would increase/(decrease) the Bank and Group equity by approximately USD1,498,201 (31 December 2017: USD1,499,257).

8 classifications of financial assets and liabilities

The classification of each class of financial assets and liabilities, and their fair values (excluding accrued interest).

Group - 30 June 2018

	Trading assets USD	Financial assets at FVTPL USD	Financial assets at FVOCI USD	Loans and receivables USD	Liabilities at amortised cost USD	Total carrying amount USD
Financial assets measured at fair value Trading assets	282,221,164	-	-	-	-	282,221,164
Derivative assets held for risk management	-	2,265,093	-	-	-	2,265,093
Financial assets at FVTPL	-	174,685,732	-	-	-	174,685,732
Financial assets at FVOCI	-	-	102,320,989	-	-	102,320,989
Financial assets not measured at fair value Balances with the Central Bank
of Malta, treasury bills and cash	-	-	-	146,592,037	-	146,592,037
Loans and advances to banks	-	-	-	421,156,689	-	421,156,689
Loans and advances to customers	-	-	-	697,219,376	-	697,219,376
Financial liabilities measured at fair value Derivative liabilities held for risk management	-	350,757	-	-	-	350,757
Financial liabilities not measured at fair value
Amounts owed to banks	-	-	-	-	528,921,075	528,921,075
Amounts owed to customers	-	-	-	-	1,072,886,915	1,072,886,915
Debt securities in issue	-	-	-	-	52,396,439	52,396,439

Group - 31 December 2017

	Trading assets USD	Designated at fair value USD	Loans and receivables USD	Available-for sale USD	Liabilities at amortised cost USD	Total carrying amount USD

Financial assets measured at fair value
Trading assets	252,509,144	-	-	-	-	252,509,144
Derivative assets held for risk management	-	722,256	-	-	-	722,256
Investments available-for-sale	-	-	-	261,244,798	-	261,244,798
Financial assets not measured at fair value
Balances with the Central Bank of Malta, treasury bills and cash	-	-	208,171,299	-	-	208,171,299
Loans and advances to banks	-	-	226,092,934	-	-	226,092,934
Loans and advances to customers	-	-	566,361,530	-	-	566,361,530
Financial liabilities measured at fair value Derivative liabilities held for risk management	-	722,922	-	-	-	722,922
Financial liabilities not measured at fair value
Amounts owed to banks	-	-	-	-	493,192,846	493,192,846
Amounts owed to customers	-	-	-	-	847,198,005	847,198,005
Debt securities in issue	-	-	-	-	54,653,654	54,653,654
Subordinated liabilities	-	-	-	-	50,000,000	50,000,000

	Financial assets at FVTPL	Financial assets at FVOCI	Loans and receivables	Liabilities at amortised cost	Total carrying amount
	USD	USD	USD	USD	USD
Financial assets measured at fair value
Derivative assets held for risk management	2,275,131	-	-	-	2,275,131
Financial assets at FVTPL	174,685,732	-	-	-	174,685,732
Financial assets at FVOCI	-	102,320,989	-	-	102,320,989
Financial assets not measured at fair value
Balances with the Central Bank
of Malta, treasury bills and cash	-		146,561,504	-	146,561,504
Loans and advances to banks	-		416,751,550	-	416,751,550
Loans and advances to customers	-		771,650,933	-	771,650,933
Financial liabilities measured at fair value
Derivative liabilities held for risk management	350,757		-	-	350,757
Financial liabilities not measured at fair value
Amounts owed to banks	-		-	499,650,506	499,650,506
Amounts owed to customers	-		-	1,020,429,581	1,020,429,581

Bank - 31 December 2017

	Designated at fair value USD	Loans and receivables USD	Available- for sale USD	Liabilities at amortised cost USD	Total carrying amount USD
Financial assets measured at fair value Derivative assets held for risk management Investments available-for-sale	722,256 -	- -	- 261,244,798	- -	722,256 261,244,798
Financial assets not measured at fair value Balances with the Central Bank
of Malta, treasury bills and cash Loans and advances to banks Loans and advances to customers	- - -	208,147,513 203,552,663 581,529,952	- - -	- - -	208,147,513 203,552,663 581,529,952
Financial liabilities measured at fair value
Derivative liabilities held for risk management Financial liabilities not measured at fair value	723,454	-	-	-	723,454
Amounts owed to banks	-	-	-	393,247,791	393,247,791
Amounts owed to customers Subordinated liabilities	- -	- -	- -	815,812,570 50,000,000	815,812,570 50,000,000

9 net trading results

	Group		Bank
	2018	2017	2018	2017
	USD	USD	USD	USD
Net trading profit/(loss) from assets held for trading
and at FVTPL	1,138,786	(72,288)	-	-
Foreign exchange rate fluctuations	(756,604)	(17,643,883)	(826,793)	(17,682,289)
Net income on derivatives held for risk management
purposes	1,733,815	15,706,039	3,909,502	15,741,076
	2,115,997	(2,010,132)	3,082,709	(1,941,213)

10 dividend income

	Group		Bank
	2018	2017	2018	2017
	USD	USD	USD	USD
Dividend income from financial assets at FVTPL	4,035,661	-	4,035,661	-
Dividend income from available-for-sale instruments	-	3,749,265	-	3,749,265
Dividend income from subsidiary	-	-	-	1,448,401
	4,035,661	3,749,265	4,035,661	5,197,666

11 taxation

Taxation -average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period.

For the six months ended 30 June 2018, the Group is estimating a net taxation charge of USD947,712 (30 June 2017: charge of USD101,477). The change in effective tax rate when compared to the Malta corporate income tax rate of 35% was caused mainly by different rates of tax for non-Malta based entities (in the United Kingdom, India and Egypt).

12 derivatives held for risk management

	Group
	30 Jun 2018	31 Dec 2017	30 Jun 2018	31 Dec 2017
	USD	USD	USD	USD
Derivative assets
Held for risk management
interest rate	-	-	10,039	-
foreign exchange	2,265,093	722,256	2,265,092	722,256
	2,265,093	722,256	2,275,131	722,256
Derivative liabilities
Held for risk management
interest rate	-	-	-	532
foreign exchange	350,757	722,922	350,757	722,922
	350,757	722,922	350,757	723,454

13 investments in subsidiaries

impairment assessment

At each reporting date the Bank carries out an impairment assessment to determine whether the recoverable amounts of its investments in subsidiaries (at cost) in its separate financial statements and the related goodwill arising on the acquisition of India Factoring and Egypt Factors reported in the consolidated financial statements are less than their carrying amount, therefore requiring a further impairment loss. At the reporting date the Bank assessed the reasonableness of the impairment in subsidiaries as disclosed in the audited financial statements for the year ended 31 December 2017. This was carried out on the basis of the underlying performance of each subsidiary during the period under review and with reference to the assumptions used in the 31 December 2017 assessment. The recoverable amounts for each investment have been calculated based on their value in use, determined by discounting the future cash flows expected to be generated from the continuing use of each entity.

ile) see below was recognised during the period ended 30 June 2018 as the recoverable amounts of this investment was determined to be lower than the l a further impairments were recognised during the period ended 30 June 2018.

FIM Holdings (Chile)

During the period ended 30 June 2018 the Group resolved to seek an orderly disposal of its investment in Latamfactors and the investment has thus be - - Latamfactors is held by FIM Holdings (Chile), a fully-owned subsidiary of FIMBank p.l.c..

Following an assessment of et impairment lo

India Factoring and Egypt Factors

As disclosed in the Financial Statements for the year ended 31 December 2017, Management has approved a set of budgets for India Factoring and Egypt Factors based on a strategy to grow the business in a changing market landscape, whilst ensuring an effective operational and control environment. These budgets formed the basis on which the recoverable amount is arrived at. In this respect, the recoverable amount for each subsidiary exceeds the carrying amount of the investment and the goodwill recognised on their initial accounting as a business combination. Whilst it is inherent that actual results may differ from those budgeted, and such variations may be significant, the Directors believe that the business plans can be supported, such that it will enable the Bank to recover the investments at least at the amount stated.

The key assumptions described above may change as economic, political and market conditions change. Whilst the recoverable amount is higher than the carrying amount, any significant adverse movement in a key assumption would lead to an impairment of the carrying amount of the investments and the related goodwill.

14 non-current assets held for sale

During the period ended 30 June 2018 the Group resolved to seek an orderly disposal of its investment in Latamfactors and the investment has - This resulted in a change in measurement its fair value less costs to sell.

Following an assessment of the fair value of the company, the carrying amount of the investment was determined to be higher than its fair value and a loss of USD2,078,082 Fair value loss on re-measurement of non-current asset held for sale Income Statement.

15 debt securities in issue

	Group		Bank
	30 Jun 2018	31 Dec 2017	30 Jun 2018	31 Dec 2017
	USD	USD	USD	USD
Unsecured promissory notes	52,396,439	54,653,654	-	-
	52,396,439	54,653,654	-	-

At 30 June 2018 ranges between 1.25% and 4.39% (31 December 2017: 1% and 3.7%).

16 rights issue

In March 2018, FIMBank launched a Rights Issue of 2 new ordinary shares for every 3 existing ordinary shares at an offer price of USD0.55 per new ordinary share. Following the conclusion of the Rights Issue, 190,909,091 new ordinary shares were allotted and listed on the Malta Stock Exchange, resulting in new equity of USD105,000,000. As part of the Rights Issue, the subordinated loan of USD50,000,000 outstanding on the closure of the offer period was used to set-off the subscription price against the amount owed by FIMBank. The increase in share capital and share premium, net of share issue costs, amounted to USD104,560,248.

17 contingent liabilities

	Group		Bank
	30 Jun 2018	31 Dec 2017	30 Jun 2018	31 Dec 2017
	USD	USD	USD	USD
Guarantee obligations incurred on behalf of third parties	3,282,900	1,186,426	50,090,509	57,601,096
	3,282,900	1,186,426	50,090,509	57,601,096

Guarantees issued to subsidiaries amount to USD46,807,609 (31 December 2017: USD56,508,748).

18 commitments

	Group		Bank
	30 Jun 2018	31 Dec 2017	30 Jun 2018	31 Dec 2017
	USD	USD	USD	USD
Commitments to purchase assets:
Undrawn credit facilities	135,990,268	190,875,472	132,801,326	167,450,639
Confirmed letters of credit	46,618,359	39,270,259	45,414,524	45,944,596
Documentary credits	19,820,435	23,755,009	29,864,399	33,918,871
Risk participations	10,812,024	5,166,842	10,812,024	5,166,842
Factoring commitments	-	12,383	5,882,893	1,772,895
Commitment to purchase assets	47,310,247	47,236,123	-	-
Credit default swaps	25,666,917	47,577,185	-	-
Commitments to sell assets:
Commitment to sell assets	(10,000,000)	-	-	-
	276,218,250	353,893,273	224,775,166	254,253,843

19 changes to controlling shareholding

The ultimate parent company of FIMBank p.l.c registered address of KIPCO is KIPCO Tower, Khalid Bin Al Waleed Street, Sharq, Kuwait City.

On 15 March 2018 as part of an internal restructuring in within KIPCO, United Gulf Holding Company B.S.C., a joint stock company with its registered address at Flat 12, Building 440, road 1705, Block 317, Diplomatic Area, Kingdom of Bahrain acquired the entire investment previously held by United Gulf Bank B.S.C. both entities themselves subsidiaries of KIPCO. As a result of this transaction United Gulf Holdings became the immediate parent company of the FIMBank Group.

statement pursuant to listing rule 5.75.3

We hereby confirm that to the best of our knowledge:

the condensed interim financial statements give a true and fair view of the financial position of the Group and of the Bank as at 30 June 2018, as well as of the financial performance and cash flows for the period then ended, fully in compliance with IAS 34, Interim Financial Reporting, adopted by the EU; and
5.75.2 and 5.81 to 5.84.

Murali Subramanian Ronald Mizzi Chief Executive Officer Chief Financial Officer

independent

To the Board of Directors of FIMBank p.l.c.

introduction

Wehave reviewed theaccompanying condensed interim financialstatements ofFIMBank p.l.c. ('the Bank') and of the Group of which the Bank is the parent ('the Condensed Interim Financial Statements') which comprise the condensed interim statements of financial position as at 30 June 2018, and the related condensed interim statements of income, comprehensive income, changesinequityandcashflowsforthesix month period then ended and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and presentation of the Condensed Interim Financial Statements in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU. Our responsibility is to express a conclusion on these Condensed Interim Financial Statements based on our review.

This report is made solely to the Board of Directors in accordance with the terms of our engagement and is released for publication in compliance with the requirements of Listing Rule 5.75.4 issued by the Listing Authority. Our review has been undertaken so that we might state to the Board of Directors those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Board of Directors for our review work, for this report, or for the conclusions we have expressed.

scope of review

We conducted our review in accordance with the International Standard on inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable ustoobtainassurance that wewouldbecome aware of all significant matters that might be identified in an audit. Accordingly, we do not express anaudit opinion.

conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying Condensed Interim Financial Statements for theperiod ended 30 June 2018 are not prepared, in all material respects, in accordance with IAS 34, Interim Financial Reporting, as adopted bythe EU.

emphasis of matter

We draw attention to note 13 to the Condensed Interim Financial Statements. At 31 December 2017, the Bank carried out an impairment assessment to determine whether the recoverable amounts of its investments in subsidiaries in its separate financial statements and the related goodwill arising on the acquisition of India Factoring and Finance Solutions Private Limited and The Egyptian Company for Factoring S.A.E reported in the consolidated financial statements are less than their carrying amounts, therefore requiring the recognition of a further impairment loss. One of the principal assumptions underlying the models used to calculated the recoverable amount relating to the equity held in India Factoring and Finance Solutions Private Limited and The Egyptian Company for Factoring S.A.E, is the attainment of the approved set of budgets used as a basis to arrive at the recoverable amounts of the respective investment in these subsidiaries and the goodwill recognized on their initial accounting as a business combination. The notes to the Condensed Interim Financial Statements explain that any significant adverse movement in a key assumption would lead to an impairment of the carrying amount of the investments and the related goodwill. Our conclusion is not modified in respect of this matter.

The Principal authorised to sign on behalf of KPMG on the review resulting in this independent auditors' report is Noel Mizzi.

KPMG Registered Auditors 14 August 2018

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2063_rns_2018-08-14_aa37bd9e-4aff-47e0-a286-d7442f4a28c6.pdf

COMPANY ANNOUNCEMENT

Quote

condensed interim financial statements 2018

group structure and principal activities

results for the year

review of performance

income statement

financial position

annual general meeting 2018

related party transactions

the second half of 2018

condensed interim statements of financial position

condensed interim statements of financial position

condensed interim income statements

condensed interim statements of comprehensive income

Group

Bank

Bank

condensed interim statements of cash flows

notes to the condensed interim financial statements

1 reporting entity

2 basis of accounting

3 significant accounting policies

3.1 standards issued but not yet effective

IFRS 16 Leases

4 changes in accounting policies

4.1 IFRS 9 financial instruments

4.1.1 classification and measurement of financial assets and financial liabilities

4.1.2 impairment of financial assets

measurement of ECLs

credit-impaired financial assets

presentation of impairment

impact of the new impairment model

4.1.3 transition

4.2 property and equipment and investment property measurement

5 use of judgements and estimates

6 operating segments

information about operating segments

reconciliation of reportable segment profit or loss

7 fair values of financial instruments

7.1 valuation of financial instruments

7.2 financial instruments measured at fair value fair value hierarchy

7.3 level 3 fair value measurements

7.3.1 reconciliation

Group 30 June 2018

Group 31 December 2017

7.3.2 unobservable inputs used in measuring fair value

trading assets

derivative assets and liabilities

financial assets at FVTPL

8 classifications of financial assets and liabilities

Group - 31 December 2017

Bank - 31 December 2017

9 net trading results

10 dividend income

11 taxation

12 derivatives held for risk management

13 investments in subsidiaries

impairment assessment

FIM Holdings (Chile)

India Factoring and Egypt Factors

14 non-current assets held for sale

15 debt securities in issue

16 rights issue

17 contingent liabilities

18 commitments

19 changes to controlling shareholding

statement pursuant to listing rule 5.75.3

independent

introduction

scope of review

conclusion

emphasis of matter

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