FIMBank Plc

Earnings Release • Mar 11, 2020

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 5.16 and 5.54:

Quote

The Board of Directors of FIMBank met in Malta on 10 March 2020 to approve the Consolidated Audited Financial Statements for the financial year ended 31 December 2019. A Preliminary Statement of Results for the financial year ended 31 December 2019 is attached to this Company Announcement and has been made available for public viewing on the Company's website at www.fimbank.com.

The Board of Directors resolved that the Consolidated Audited Financial Statements be submitted for approval by the shareholders at the forthcoming Annual General Meeting to be held in Malta on 7 May 2020. At the General Meeting, the Board of Directors will not be recommending a dividend.

Unquote

Andrea Batelli Company Secretary

11 March 2020

FIMBank p.l.c.

Preliminary statement of annual results

For the year ended 31 December 2019

General

The Preliminary Statement of Annual Results is terms of Matta Financial Services Authority Listing Rules 5.16 and 5.54. Figures have been extracted from FIMBank p.l.c.'s Audited Financial year ended 31 December 2019, as approved by the Board of Directors on 10 March 2020 and which have been audited by KPMG. The Financial Statements refer to the consolidated accounts of the FIMBank Group (the "Group"), comprising FIMBank", the "Bank") and its subsidiaries London Forfaiting Company Limited ("LFC"), India Factoring and Finate Limited ("India Factoring"), The Egyptian Company for Factoring S.A.E. ("Egypt Factors"), FIM Holdings (Chile) S.p.A., FIM Business Solutions Limited and FIM Property Investment Limited. Coverage is also given to the equity-accounted investee BRASILFACTORS S.A. ("Brasilfactors").

Review of performance

During the financial year 2019, the Group continued its transfornation into a strong trade finance player, proactively seeking to optimise its business fundamentals whilst also reacting to market, industry developments in the regions in which it operates. The overall financial performance of the Group reflects the execution of a de-risking in a temporary asset reduction positively improving the risk profile of the key portfolios. Following this process, the Group strengthened the structures of its credit transactions, migrated to superior counterparty profiles and reduct, single obligor and geographical presence. This has however led to a decrease in revenues as a result of lower new business and stock levels carried during the years, the Group remained highly effective in the management of its asset-liability structures, driving efficiency and costs, and qenerating additional revenues from favourable capital markets conditions. During the year, impairment coverage on legacy and new delinquent exposures has increased on the different resolution tracks. Such impairments were offset by the recovery of other long overdue exposures reflecting the ongoing actions to recoup lost value in past years. The Group continued investing in its human capital and IT infrastructure with the aim of reinforcing its core operational assets, and concurrently ensuring the best use of its resources through operational innovations and cost efficiencies.

The Bank, as the parent of the Group, maintains overall responsibility for the Group's business and development. During the year, the Bank absorbed most of the de-risking outcome in its core trade and commodity finance portfolio, with a direct impact on interest and fee revenues. The shipping portfolio also experienced volatility due to market conditions limiting financing opportunities of targeted vessels. In Malta, the real estate portfolio grew to its set targets, with the Bank aware of the industry's inherefore executing a vigilant approach to this ine of business. Treasury and cash management operations were also effective in the areas of liquidity and funding, foreign currency and capital markets, with financial institutions' remaining adequate to support business across the Group. The financial results also reflect the need for higher impairment coverage on trade commodity facilities. Recoveries were slower than expected to pick up during the forthcoming year, During the year, the Bank received dividend income from a subsidiary undertaking, with no impact on the Group consolidated results.

Across the Group, LFC had another successful year and delivered strong results. With no significant need to de-risk, LFC further expanded its portfolio with a corresponding increase in trading volumes model, institutional expertise and a risk-balanced portfolio enable LFC to achieve consistently superior revenue margins, complemented by an efficient mix of funding from the Bank and third party institutions with a likewise lean operational cost structure. During 2019 LFC continued to recover on past overdue transactions whilst actively managing new risks and market developments as they arise. As LFC is domiciled in the Group continued to assess the impact of Brexit on the company's operations and its affiliation within the Group. The impact is considered to be minimal as LFC's appetite for diverse risks across different business sectors and geographies coupled with a global footprint, places LFC in a strong position to manage any identifiable risks associated with the United Kingdom withdrawing from the EU.

India Factoring also grew during the year, at a slower-than-planned pace, returning modest results. During 2019, the business continued pivoting away from the domestic business to an export-driven book, upgrading and diversifying the exposures to a stream of larger-scale counterparties. Notwithstanding the marginal growth, India Factoring has significantly increased its asset turnover particularly in the second half of the year, building adequate pipeline and gaining the months ahead. Impairments were lower than prior years as no new delinquent loans were identified during the year with recoveries partly offsetting resulting impairment on assets at different impairment stages.

Egypt Factors produced another stable performance. As the Egypt market and economic context becomes more stable, Egypt Factors faces a higher level of competition in sourcing new clients at the subsidiary has successfully expanded its portfolio during the year, with a growing pipeline and asset levels at superior margins. In 2019, Egypt Factors also recovered a legacy non-performing exposure, boosting its annual profitability and contribution to the Group.

At the beginning of the year the Group implemented the IFRS 16 leasing accounting standard impacting the classification and measurement of leases, particularly where the Group is a lesult of these requirements, the Group recognised new "right-of-use assets" and related "lease liabilities". There have been no changes to lessor. The introduction of IFRS 16 did not have an impact on the Group reserves at the beginning of the year.

Statement of profit or loss

For the year ended 31 December 2019, the Group registered a post-tax profit of USD4.5 million compared to a profit of USD10.2 million in 2018. Group earnings per share stood at US cents 2.22). The results for the year under review are summarised in the table below, which should be read in conjunction with the explanatory commentary that follows:

		Group
	2019	2018	Movement
	USD	USD	USD
Net interest income	32,321,233	31,198,703	1,122,530
Net fee and commission income	12,480,522	17,645,824	(5,165,302)
Dividend income	3,591,794	7,660,271	(4,068,477)
Net results from foreign currency operations	1,946,289	1,293,996	652,293
Other operating income	932,009	911,206	20,803
Net operating income	51,271,847	58,710,000	(7,438,153)
Operating expenses	(37,019,821)	(37,576,677)	556,856
Net operating results	14,252,026	21,133,323	(6,881,297)
Net impairment losses	(13,066,172)	(13,283,010)	216,838
Net results from trading assets and other financial instruments	6,076,270	5,982,890	93,380
Share of results of equity-accounted investees		238,634	(238,634)
Loss upon disposal of equity-accounted investee		(2,062,937)	2,062,937
Fair value gain from investment property		984,951	(984,951)
Profit before tax	7,262,124	12,993,851	(5,731,727)
Taxation	(2,732,021)	(2,790,218)	58,197
Profit for the period	4,530,103	10,203,633	(5,673,530)

For the year under review, 'net operating income less operating expenses, contracted by USD6.9 million to USD14.3 million, as the Group embarked on a derisking process, with the aim of strengthening the quality of the portfolio, through improved transaction structures and mitigation of several risks.

The Group's 'net operating income' droped by 13% from USD51.3 million. Net interest income, net fees and commission income and dividend income combined together decreased by 14%, from USD48.4 million. Revenues dropped due to a combination of certain measures implemented by the Group and economic conditions. As a result of a number of non-performing loans that were identified in prior years, the Group has implemented various changes to its risk frameworks, which led the Group to de-risk its main portfolios – and as a consequence the income generated from these portingly. In addition, interest and fee income on exposures that were classified as "non-performing" ceased being recognised in the income statement. Notwithstanding this, the Group optimised on its funding structure to offset the drop in revenues. The Group has implemented various asset and liability management measures to create funding efficiencies, to save on interest costs and to limit non-remunerative excess liquidity, while ensuring that sufficient liquidity remains available to meet business and requirements. The interest income of USD1.1 million is evidence of this optimisation.

'Net results from foreign currency operations' increased by 50% to USD1.9 million. During the year, the volume of foreign currency transactions with clients. In addition as a result of stringent asset/liability management, it was of FX swaps and minimise related costs.

'Operating expenses' were contained at USD37.0 million. The Group continued investing in its human resources through the attraction, retention of staff. Likewise significant investments were made in the IT infrastructure and systems, upgrading a number of tools in the business and regulatory spaces.

During the year, the Group recognised additional IFRS 9 "Stage 3" impairments of USD14.2 million largely on a number of non-performing exposures in FIMBank and India Factoring. As in other similar cases, uncertial resolution and recovery still exists at the reporting date and judgement was applied in determining the appropriate level of impairment – guided by a cautious approach based on the facts and circumstances available. IFRS 9 "Stage 2" impairment allowances decreased by USD0.5 million following an improvement in the risk profile of a number of exposures, as well as stage 1 or 2 and Stage 3. During the year, the Group has also made recoveries of exposures previously recognised as non-performing of USD0.7 million.

'Net results from trading assets and other financial instruments' were strong, owing to gains arising book and opportunistic sales in the fixed-income bond book, held for liquidity purposes. During 2019, the Group has also made recoveries within the trading book of USD3.0 million.

lnvestment property was not revalued during the year under review, as that the market value of the property remained largely unvarying to prior year.

Financial position

At 31 December 2019, total consolidated assets stood at USD1.89 billion from end-2018. As a result of the de-risking process there has been a significant shift in portfolios. Loans and customers fell by USD90.6 million and financial assets held at fair value also dropped by USD56.2 million. In contrast, 'trading assets' grew by USD113 million and treased by USD56.4 million. Other changes in consolidated assets reflect the right-of-use assets following the implementation of IFRS 16 and the utilisation of deferred tax.

Total consolidated liabilities as at 31 December 2019 stood at USD1.7 million over end-2018. The growth in liabilities is largely due to an increase of USD30.3 million in deposits from corporate and retail clients offset by a marginal drop of USD9.7 million from wholesale funding sources ('amounts owed to banks' and 'debt securities in issue'). Other changes in consolidated liabilities reflect the recognition of the lease liabilities following the implementation of IFRS 16.

'Total equity attributable to the equity holders of the Bank' as at financial reporting date stood at USD282.5 million, relatively flat when compared to the prior period. The marqinal increase of USD2.2 million reflects profits for the year and other equity adjustments.

At 31 December 2019 the Group's CET1 ratio stood at 16.9% (2018: 17.6%) and total capital ratio at 16.9% (2018: 18.0%).

Total Group 'commitments', consisting mainly of credit, documentary credits, commitments to purchase forfaiting asets and factoring commitments, stood at USD166 million while 'contingent liabilities', principally consisting guarantee obligations, stood at USD5 million.

Outlook for 2020

For 2020, the Group is expected to grow the key areas of business, building on core established strengths and approach to business implemented over the past months. With a reinforced front office organisation, the Group will continue pursuing business opportunities and offering differentiated products, expertise in the industries and qeographies across the clients' supply chain. Concurrently, the Group will keep assessing the viability of its different businesses, looking for scalability and returns as the key drivers to generate consistent returns and value to the organisation, supported by a dedicated function, recoveries of non-performing assets will remain a focus area, both from an income perspective' as well as in improving the overall portfolio quality. In a context of tighter regulation and a competitive business context, the attention to controls, operations paramount to remain agile in preparing for the future. With a talented human capital pool, and backed by a solid shareholding base, FIMBank will progress towards its strategic objectives in a paced and effective manner.

Dividends and reserves

The Directors will not be recommending the payment of a dividend to the Annual General Meeting of shareholders.

Statements of profit or loss

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Interest income	50,531,699	56,136,377	30,311,233	35,303,561
Interest expense	(18,210,466)	(24,937,674)	(14,037,860)	(19,139,77)
Net interest income	32,321,233	31,198,703	16,273,373	16,163,790
Fee and commission income	18,426,111	23,002,373	7,753,143	12,849,903
Fee and commission expense	(5,945,589)	(5,356,549)	(3,078,283)	(2,799,252)
Net fee and commission income	12,480,522	17,645,824	4,674,860	10,050,651
Net trading results	5,837,243	7,287,784	922,619	2,643,350
Net gain/(loss) from other financial instruments carried at fair value	2,185,316	(10,898)	2,185,316	(10,898)
Dividend income	3,591,794	7,660,271	43,591,794	17,660,271
Loss upon disposal of equity-accounted investee		(2,062,937)
Fair value gain on investment property		984,951
Other operating income	932,009	911,206	118,904	125,068
Operating income before net impairment	57,348,117	63,614,904	67,766,866	46,632,232
Net impairment charge on financial assets	(13,066,172)	(13,283,010)	(14,210,257)	(16,970,119)
Operating income	44,281,945	50,331,894	53,556,609	29,662,113
Administrative expenses	(33,756,493)	(35,586,856)	(20,305,701)	(23,787,047)
Depreciation and amortisation	(3,263,328)	(1,989,821)	(2,896,531)	(1,022,470)
Total operating expenses	(37,019,821)	(37,576,677)	(23,202,232)	(24,809,517)
Operating profit	7,262,124	12,755,217	30,354,377	4,852,596
Share of results of equity-accounted investees (net of tax)		238,634
Profit before tax	7,262,124	12,993,851	30,354,377	4,852,596
Taxation	(2,732,021)	(2,790,218)	(765,433)	(1,115,249)
Profit for the year	4,530,103	10,203,633	29,588,944	3,737,347
Profit attributable to:
Owners of the Bank	4,419,145	10,196,095	29,588,944	3,737,347
Non-controlling interests	110,958	7,538
	4,530,103	10,203,633	29,588,944	3,737,347
Earnings per share
Basic earnings per share (US cents)	0.86	2.22	5.75	0.81

Statements of other comprehensive income

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Profit for the year	4,530,103	10,203,633	29,588,944	3,737,347
Other comprehensive income:
ltems that will not be reclassified to profit or loss:
Fair value reserve (property and equipment), gross of deferred tax		2,119,688
Movement in fair value reserve (fair value through other
comprehensive income equity instruments):
Equity investments at fair value through other comprehensive income - net change in fair value		(7,608)		(7,608)
Related tax		(614,933)		2,662
		1,497,147		(4,946)
ltems that are or may be reclassified subsequently to profit or loss: Movement in translation reserve:
Foreign operations - foreign currency translation differences	(1,886,278)	(2,263,430)
Movement in fair value reserve (fair value through other comprehensive income debt instruments):
Debt investments in fair value through other comprehensive
income - net change in fair value	2,004,196	402,903	2,004,196	402,903
Debt investments in fair value through other comprehensive income - reclassified to profit or loss	(2,130,473)	86,049	(2,130,473)	86,049
Related tax	(274,744)	234,695	(274,744)	234,695
Other comprehensive (expense)/income, net of tax	(2,287,299)	(42,636)	(401,021)	718,701
Total comprehensive income	2,242,804	10,160,997	29,187,923	4,456,048
Total comprehensive income attributable to:
Owners of the Bank	2,098,914	9,997,968	29,187,923	4,456,048
Non-controlling interests	143,890	163,029
	2,242,804	10,160,997	29,187,923	4,456,048

Statements of financial position

As at 31 December 2019

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Assets
Balances with the Central Bank of Malta, treasury bills and cash	208,277,004	151,910,865	208,259,407	151,891,005
Derivative assets held for risk management	142,249	92,852	96,285	109,727
Trading assets	460,238,536	347,284,967
Loans and advances to banks		325,569,729
	246,078,195		232,351,750	321,550,241
Loans and advances to customers	649,890,157	661,026,491	811,152,849	730,708,445
Financial assets at fair value through profit or loss	125,342,798	173,438,374	125,342,798	173,438,374
Financial assets at fair value through other comprehensive income	79,367,556	87,468,166	79,367,556	87,468,166
Investments at amortised cost	9,785,496	9,923,499	9,785,496	9,923,499
Investments in subsidiaries			147,948,385	102,595,614
Property and equipment	33,786,469	31,111,769	5,229,059	968,472
Investment property	17,223,820	17,223,820
Intangible assets and goodwill	13,107,881	13,290,401	4,647,642	4,669,342
Current tax assets	1,846,627	1,720,921	226,886
Deferred tax assets	36,773,586	38,694,104	22,011,162	22,599,041
Other assets	11,169,850	10,213,932	8,824,153	1,352,443
Total assets	1,893,030,224	1,868,969,890	1,655,243,428	1,613,274,369
Liabilities and equity
Liabilities
Derivative liabilities held for risk management	187,700	2,928,925	193,691	2,928,925
Amounts owed to banks	452,291,304	454,398,279	405,072,025	398,815,757
Amounts owed to customers	1,057,824,242	1,027,544,811	978,134,002	961,292,743
Debt securities in issue	79,550,865	87,096,378		14,849,948
Current tax liabilities	588,368	356,579
Deferred tax liabilities	4,215,075	4,215,075
Provision for liabilities and charges	88,435	269,784	85,159	269,784
Other liabilities	17,271,633	13,470,239	13,077,128	5,708,599
Total liabilities	1,612,017,622	1,590,280,070	1,396,562,005	1,383,865,756
Equity
Share capital	261,221,882	252,720,107	261,221,882	252,720,107
Share premium	858,885	9,275,773	858,885	9,275,773
Reserve for general banking risks	2,323,486	1,242,511	2,323,486	1,242,511
Currency translation reserve	(7,086,044)	(5,166,834)
Fair value reserve	11,311,278	11,112,299	357,233	758,254
Other reserve	2,916,863	2,837,122	2,681,041	2,681,041
Retained earnings/(Accumulated losses)	10,937,616	/,684,096	(8,761,104)	(31,269,073)
Total equity attributable to equity holders of the Bank	282,483,966	280,305,074	258,681,423	229,408,613
Non-controlling interests	(1,4/1,364)	(1,615,254)
Total equity	281,012,602	278,689,820	258,681,423	229,408,613
Total liabilities and equity	1,893,030,224	1,868,969,890	1,655,243,428	1,613,274,369
Memorandum items
Contingent liabilities	4,899,827	2,864,826	61,628,654	67,466,612
Commitments	165,939,920	188,606,767	143,026,427	158,386,020

For the year ended 31 December 2019

Group

	Attributable to equity holders of the Bank
							Retained
			Reserve for	Currency			earnings/		Non-
	Share	Share	general	translation	Fair value	Other	(Accumulated		controlling	Total
	capital	premium	banking risks	reserve	reserve	reserve	(OSS)	Total	interests	equity
	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Balance at 1 January 2019	252,720,107	9,275,773	1,242,511	(5,166,834)	11,712,299	2,837,122	7,684,096	280,305,074	(1,615,254)	278,689,820
Total comprehensive income
Profit for the year							4,419,145	4,419,145	110,958	4,530,103
Other comprehensive income:
Fair value reserve (fair value through other
comprehensive income debt instruments):
Debt investments at fair value through other
comprehensive income - net change in fair value					1,729,452			1,729,452		1,729,452
-
comprehensive income - reclassified
to profit or loss					(2,130,473)			(2,130,473)		(2,130,473)
Translation reserve:
Foreign operations - foreign translation difference				(1,919,210)				(1,919,210)	32,932	(1,886,278)
Total other comprehensive income				(1,919,210)	(401,021)			(2,320,231)	32,932	(2,287,299)
Total comprehensive income				(1,919,210)	(401,021)		4,419,145	2,098,914	143,890	2,242,804
Transactions with owners of the Bank
Contributions and distributions:
lssue of new shares, net of transaction costs	75,253	9,634				(4,909)		79,978		79,978
Bonus issue of shares	8,426,522	(8,426,522)
Total transactions with owners of the Bank	8,501,775	(8,416,888)		-	-	(4,909)		79,978		79,978
Transfer between reserves			1,080,975			84,650	(1,165,625)			-
Balance at 31 December 2019	261,221,882	858,885	2,323,486	(7,086,044)	11,311,278	2,916,863	10,937,616	282,483,966	(1,471,364)	281,012,602

For the year ended 31 December 2018

Group

					Attributable to equity holders of the Bank
							Retained
			Reserve for	Currency			earnings/		Non-
	Share	Share	general	translation	Fair value	Other	(Accumulated		controlling	Total
	capital	premium	banking risks	reserve	reserve	reserve	loss)	Total	interests	equity
	USD	USD	USD	USD	USD	USD	USD	USD	USD	USD
Balance 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, net of tax					(41,948)		(8,811,984)	(8,853,932)	(68,808)	(8,922,740)
Restated balance at 1 January 2018	157,265,562	173,113	608,284	(2,747,913)	9,491,505	2,870,270	(1,910,920)	165,749,901	(1,778,283)	163,971,618
Total comprehensive income
Profit for the year							10,196,095	10,196,095	7,538	10,203,633
Other comprehensive income:
Fair value reserve (fair value through other
comprehensive income debt instruments):
Debt investments at fair value through other					651,668			651,668		651,668
comprehensive income - net change in fair value Debt investments at fair value through other
comprehensive income - reclassified to profit or loss					71,979			71,979		71,979
Fair value reserve (fair value through other
comprehensive income equity instruments):
Equity investments at fair value through other					(4,946)			(4,946)		(4,946)
comprehensive income - net change in fair value Fair value reserve (property and equipment):
Property and equipment - net change in fair value					1,502,093			1,502,093		1,502,093
Translation reserve:
Foreign operations - foreign translation differences				(2,418,921)				(2,418,921)	155,491	(2,263,430)
	-	-				-
Total other comprehensive income				(2,418,921)	2,220,794			(198,127)	155,491	(42,636)
Total comprehensive income		-		(2,418,921)	2,220,794	-	10,196,095	9,997,968	163,029	10,160,997
Transactions with owners of the Bank
Contributions and distributions:
lssue of new shares, net of transaction costs	95,454,545	9,102,660						104,557,205		104,557,205
Total transactions with owners of the Bank	95,454,545	9,102,660				-		104,557,205	-	104,557,205
Transfer between reserves			634,227			(33,148)	(601,079)
Balance at 31 December 2018	252,720,107	9,275,773	1,242,511	(5,166,834)	11,712,299	2,837,122	7,684,096	280,305,074	(1,615,254)	278,689,820

For the year ended 31 December 2019

Bank

			Reserve for
	Share	Share	general	Fair value	Other	Accumulated	Total
	capital	premium	banking risks	reserve	reserve	losses	equity
	USD	USD	USD	USD	USD	USD	USD
Balance at 1 January 2019	252,720,107	9,275,773	1,242,511	758,254	2,681,041	(37,269,073)	229,408,613
Total comprehensive income
Profit for the year						29,588,944	29,588,944
Other comprehensive income:
Fair value reserve (fair value through other comprehensive income debt instruments):
Debt investments at fair value through other comprehensive income - net change in fair value				1,729,452			1,729,452
Debt investments at fair value through other comprehensive income - reclassified to profit or loss				(2,130,473)			(2,130,473)
Total other comprehensive income	-	-	-	(401,021)		-	(401,021)
Total comprehensive income			।	(401,021)	-	29,588,944	29,187,923
Transactions with owners of the Bank
Contributions and distributions:
lssue of new shares, net of transaction costs	75,253	9,634					84,887
Bonus issue of shares	8,426,522	(8,426,522)
Total transactions with owners of the Bank	8,501,775	(8,416,888)				-	84,887
Transfer between reserves			1,080,975			(1,080,975)	-
Balance at 31 December 2019	261,221,882	858,885	2,323,486	357,233	2,681,041	(8,761,104)	258,681,423

For the year ended 31 December 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 equity USD
Balance at 31 December 2017 Adjustment on initial application of IFRS 9, net of tax Restated balance at 1 January 2018	157,265,562 157,265,562	173,113 173,113	608,284 608,284	81,501 (41,948) 39,553	2,681,041 2,681,041	(35,768,147) (4,604,046) (40,372,193)	125,041,354 (4,645,994) 120,395,360
Total comprehensive income
Profit for the year						3,737,347	3,737,347
Other comprehensive income: Fair value reserve (fair value through other comprehensive income debt instruments): Debt investments at fair value through other comprehensive income - net change in fair value Debt investments at fair value through other comprehensive income - reclassified to profit or loss Fair value reserve (fair value through other comprehensive income equity instruments): Equity investments at fair value through other comprehensive income - net change in fair value Total other comprehensive income	-	-	-	651,668 71,979 (4,946) 718,701		-	651,668 71,979 (4,946) 718,701
Total comprehensive income			-	718,701		3,737,347	4,456,048
Transactions with owners of the Bank
Contributions and distributions: Issue of new shares, net of transaction costs	95,454,545	9,102,660					104,557,205
Total transactions with owners of the Bank	95,454,545	9,102,660					104,557,205
Transfer between reserves			634,227			(634,227)
Balance at 31 December 2018	252,720,107	9,275,773	1,242,511	758,254	2,681,041	(37,269,073)	229,408,613

Statements of cash flows

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Cash flows from operating activities
Interest and commission receipts	71,560,049	78,399,722	36,009,502	47,228,220
Exchange (paid)/received	(562,634)	5,463,043	(489,810)	7,931,548
Interest and commission payments	(25,998,371)	(30,822,738)	(18,937,449)	(22,327,367)
Payments to employees and suppliers	(35,414,659)	(32,986,848)	(18,718,132)	(20,946,857)
Operating profit/(loss) before changes in operating
assets/liabilities	9,584,385	20,053,179	(2,135,889)	11,885,544
(Increase)/Decrease in operating assets:
Trading assets	(11,140,231)	(92,578,189)
Loans and advances to customers and banks -	71,026,220	(84,114,645)	88,523,168	(61,739,013)
Other assets -	(1,485,134)	5,264,549	(1,619,293)	3,639,490
Increase/(Decrease) in operating liabilities:
Amounts owed to customers and banks	45,935,781	(28,221,527)	60,938,417	39,022,653
Other liabilities	1,140,813	350,536	1,325,649	220,685
Net advances from subsidiary companies -			(118,129,368)	(109,290,278)
Net cash generated/(absorbed by) from operating activities
before income tax	15,061,834	(179,246,097)	28,902,684	(116,260,919)
Income tax (paid)/refunded	(1,315,725)	829,633	(454,818)	907,016
Net cash flows from/(used in) operating activities	13,746,109	(178,416,464)	28,447,866	(115,353,903)
Cash flows from investing activities
Payments to acquire financial assets at fair value
through profit or loss	(2,469,245)	(18,092,429)	(2,469,245)	(18,092,429)
Proceeds to acquire financial assets at fair value
through other comprehensive income	(84,984,922)		(84,984,922)
Payments to acquire investments at amortised cost		(9,881,423)		(9,881,423)
Payments to acquire shares in subsidiary companies			(5,352,772)
Payments to acquire shares in other investments		(35,210)		(35,210)
Payments to acquire property and equipment	(1,085,120)	(657,420)	(372,658)	(344,451)
Payments to acquire intangible assets	(951,219)	(2,586,155)	(951,219)	(2,543,743)
Proceeds on disposal of financial assets at fair value through profit or loss	50,000,000		50,000,000
Proceeds on disposal of financial assets at fair value
through other comprehensive income	93,035,159	15,000,000	93,035,159	15,000,000
Proceeds on disposal of interests in equity-accounted investees		2,470,007
Proceeds on disposal of property and equipment	8,966	846,831	3,551
Receipt of dividend	4,628,411	7,472,717	4,628,411	7,472,717
Net cash flows from/(used in) investing activities	58,182,030	(5,463,082)	53,536,305	(8,424,539)
Increase/(Decrease) in cash and cash equivalents c/f	71,928,139	(183,879,546)	81,984,171	(123,778,442)

Statements of cash flows

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Increase/(Decrease) in cash and cash equivalents b/f	71,928,139	(183,879,546)	81,984,171	(123,778,442)
Cash flows from financing activities
Issue of share capital -	84,887	54,557,207	84,887	54,557,207
Net movement in debt securities -	(7,873,209)	32,427,718	(14,834,943)	14,834,942
Payment of lease liabilities	(751,807)		(2,354,026)
Net cash flows (used in)/from financing activities	(8,540,129)	86,984,925	(17,104,082)	69,392,149
Increase/(Decrease) in cash and cash equivalents	63,388,010	(96,894,621)	64,880,089	(54,386,293)
Analysed as follows:
Effect of exchange rate changes on cash and cash equivalents	(5,031,085)	(13,097,651)	(5,356,234)	(11,719,319)
Net increase/(decrease) in cash and cash equivalents	68,419,095	(83,796,970)	70,236,323	(42,666,974)
Increase/(Decrease) in cash and cash equivalents	63,388,010	(96,894,621)	64,880,089	(54,386,293)
Cash and cash equivalents at beginning of year	81,782,001	178,676,622	99,006,852	153,393,145
Cash and cash equivalents at end of year	145,170,011	81,782,001	163,886,941	99,006,852