FIMBank Plc

Interim / Quarterly Report • Aug 8, 2019

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.

Quote

The Board of Directors of FIMBank met in London on 8 August 2019, to approve the Consolidated and the Bank's Interim Financial Statements for the six months ended 30 June 2019.

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.

Unquote

Andrea Batelli Company Secretary

8 August 2019

Condensed Interim Financial Statements 2019

Contents	Page
Directors' report pursuant to Listing Rule 5.75.2	2
Condensed interim financial statements:
Condensed interim statements of financial position	6
Condensed interim statements of profit or loss	8
Condensed interim statements of other comprehensive income	g
Condensed interim statements of changes in equity	10
Condensed interim statements of cash flows	14
Notes to the condensed interim financial statements	15
Statement pursuant to listing rule 5.75.3	32
Independent auditors' report on review of condensed interim financial statements	33

Results for the year

Group structure and principal activities

-

-

• -
  -
  -

Review of performance

Income statement

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

		Group
	2019	2018	Movement
	USD	USD	USD
Net interest income	16,002,172	13,442,515	2,559,657
Net fee and commission income	6,353,441	9,408,279	(3,054,838)
Dividend income	3,858,668	4,035,661	(176,993)
Net results from foreign currency operations	1,161,762	977,211	184,551
Other operating income	434,295	445,401	(11,106)
Net operating income	27,810,338	28,309,067	(498,729)
Operating expenses	(18,691,904)	(18,516,181)	(175,723)
Net operating results	9,118,434	9,792,886	(674,452)
Net impairment (losses)/gains	(579,256)	(2,091,439)	1,512,183
Net results from trading assets and other financial instruments	1,109,134	1,138,786	(29,652)
Share of results of equity-accounted investees		238,634	(238,634)
Fair value loss on re-measurement of non-current asset held for sale		(2,078,082)	2,078,082
Profit before tax	9,648,312	7,000,785	2,647,527
Taxation	(2,161,533)	(947,712)	(1,213,821)
Profit for the period	7,486,779	6,053,073	1,433,706

During the period under review, profit before tax increased by 38% million - as lover impairment charges and fair value adjustments offset a reduction in the Group's net operating results.

The Group's net operating income (net revenues) marginally decreased by 2% from USD28.3 million. Net interest income increased by 19% to USD16.0 million, as improvements in the Group offset the reduction in interest income resulting from lower asset levels. Net fees and commission dropped drastically by USD3.1 million on the back of lower gross fee income due to a reduction in new transactions generated during the period and higher fees payable on created costs. Net results from foreign currency operations increased by 19% to USD1.2 million as the client-driven FX business has improved compared to same period in 2018. Overall, both net interest margins have improved when compared to last year notwithstanding the lower average asset levels carried during the first six months of the year.

Operating expenses for the six months under review stood at USD18.7 million -largely flat compared to the USD18.5 million in 2018. This was consistent across main cost lines - staff, other and depreciation - with all cost budgets remaining under continuous oversight to ensure the right balance between revenues developments and costs. In the beginning of the Group has implemented IFRS16 - Leases, which has resulted in the on-balance sheet recognition of Right of Use Liabilities for all arrangements were the Group is a lessee. In the income statement the recognition of expenditure has shifted out of Administrative Expenses (for lease payments) to a combination of Interest Expense and Depreciation.

As reported in the audited financial statements for the year ended 31 December 2018 the Group had, last year, identified a number of nonperforming exposures on which impairment charges were recorded in the second half of 2018. For the current six months, the Group has maintained adequate coverage on these non-performing exposures, extended to all assets subject to IFRS9-Financial Instruments. As a result of this, net impairment charges for the six months 2019 (IFRS9 Stages 1, 2 and 3) amounted to USD0.6 million, compared to the USD2.1 million charge in 2018. In 2019, net impairments are inclusive of a fully provided exposure amounting to USD3.0 million.

Results from trading assets and other financed consistent with 2018 at USD 1.1 million - following an improvement in trading gains and overall market values of a number of trading assets held in the forfaiting portfolio.

In 2018, the Group's investment in Latamfactors had contributed to a net share of profit (equity method) of USD0.2 million and a fair value loss of USD2.1 million. Latamfactors was disposed in the second half of 2018.

Financial position

Annual general meeting 2019

Second half of 2019

			Group		Bank
		30 Jun 2019	31 Dec 2018	30 Jun 2019	31 Dec 2018
	Note	USD	USD	USD	USD
ASSETS
Balances with the Central Bank of Malta, Treasury Bills and
cash		124,891,235	151,910,865	124,869,240	151,891,005
Derivative assets held for risk management	11	523,712	92,852	581,460	109,727
l rading assets		296,207,631	347,284,967
Loans and advances to banks		305,748,758	325,107,199	296,050,236	321,088,829
Loans and advances to customers		674,990,682	655,724,525	674,290,193	725,542,030
Financial assets at fair value through profit or loss		175,815,496	173,438,374	175,815,496	173,438,374
Financial assets at fair value through
other comprehensive income		62,756,218	86,608,375	62,756,218	86,608,375
Investments at amortised costs		9,848,853	9,846,749	9,848,853	9,846,749
Investments in subsidiaries	12			10/,953,397	102,595,614
Property and equipment		33,333,723	31,111,769	5,954,036	968,472
Investment property		17,223,820	17,223,820
Intangible assets and goodwill		13,550,340	13,290,401	4,860,579	4,669,342
Current tax assets		1,613,461	1,720,921
Deferred tax assets		36,564,536	38,694,104	20,921,148	22,599,041
Other assets		6,062,008	7,659,580	6,105,946	5,366,304
Prepayments and accrued income		11,460,311	8,985,607	14,844,292	8,280,725
Total assets		1,770,590,784	1,868,700,108	1,504,851,094	1,613,004,587
Liabilities and equity
Liabilities
Derivative liabilities held for risk management	11	1,274,708	2,928,925	1,2/4,708	2,928,925
Amounts owed to banks		306,321,701	453,055,321	260,047,913	397,913,033
Amounts owed to customers		1,089,596,877	1,023,972,887	1,001,398,759	957,720,771
Debt securities in issue	13	65,124,514	87,081,373		14,834,943
Current tax liabilities		832,516	356,519
Deferred tax liability		4,215,075	4,215,075
Provision for liabilities and charges		210,013		198,756
Other liabilities		2,762,586	1,179,728	5,341,878	1,007,819
Accruals and deferred income		14,041,107	17,220,394	7,931,829	9,190,483
Total liabilities		1,484,379,157	1,590,010,288	1,276,193,843	1,383,595,974
Equity
Share capital	14	261,221,882	252,720,107	261,221,882	252,720,107
Share premium	14	853,810	9,215,113	858,885	9,215,113
Reserve for general banking risks		1,762,903	1,242,511	1,762,903	1,242,511
Currency translation reserve		(6,120,889)	(5,166,834)
Fair value reserve		12,642,048	11,12,299	1,688,003	758,254
Other reserve		2,936,624	2,837,122	2,681,041	2,681,041
			7,684,096
Retained earnings/(Accumulated losses) Total equity attributable to equity holders of the Bank		14,494,219 287,790,597	280,305,074	(39,555,463) 228,657,251	(31,269,073) 229,408,613
Non-controlling interests		(1,5/8,970)	(1,615,254)
Total equity		286,211,627	278,689,820	228,657,251	229,408,613
Total liabilities and equity		1,770,590,784	1,868,700,108	1,504,851,094	1,613,004,587

Condensed interim statements of financial position

		Group		Bank
		30 Jun 2019	31 Dec 2018	30 Jun 2019	31 Dec 2018
	Note	USD	USD	USD	USD
Memorandum items
Contingent liabilities	15	6,260,503	2,864,826	58,280,646	67,466,612
Commitments	16	213,448,987	188,606,767	118,908,439	158,386,020

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

John C. Grech Chairman

Masaud M. J. Hayat Vice Chairman

		Group		Bank
		2019	2018	2019	2018
	Note	USD	USD	USD	USD
Interest income		26,168,513	26,246,124	16,361,046	17,105,569
Interest expense		(10,166,341)	(12,803,609)	(7,813,762)	(9,541,003)
Net interest income		16,002,172	13,442,515	8,547,284	7,564,566
Fee and commission income		9,461,040	11,618,863	4,016,094	6,961,966
Fee and commission expense		(3,107,599)	(2,210,584)	(1,567,176)	(1,223,778)
Net fee and commission income		6,353,441	9,408,279	2,448,918	5,738,188
Net trading results	9	2,270,818	2,115,997	(308,749)	3,082,709
Net gain from other financial instruments carried at fair value		78		78
Dividend income	10	3,858,668	4,035,661	3,858,668	4,035,661
Other operating income		434,295	445,401	60,580	62,299
Operating income before net impairment		28,919,472	29,447,853	14,606,779	20,483,423
Net impairment losses on financial instruments		(579,256)	(2,091,439)	(3,482,604)	(5,504,002)
Operating income		28,340,216	27,356,414	11,124,175	14,979,421
Administrative expenses		(17,130,274)	(17,527,378)	(10,336,098)	(12,038,565)
Depreciation and amortisation		(1,561,630)	(988,803)	(1,466,998)	(484,043)
Total operating expenses		(18,691,904)	(18,516,181)	(11,803,096)	(12,522,608)
Operating profit/(loss)		9,648,312	8,840,233	(678,921)	2,456,813
Share of results of equity accounted investees (net of tax) Fair value loss on re-measurement of non-current asset			238,634
held for sale			(2,078,082)
Profit/(Loss) before tax		9,648,312	7,000,785	(678,921)	2,456,813
Taxation		(2,161,533)	(947,712)	(1,087,077)	(791,025)
Profit/(Loss) for the period		7,486,779	6,053,073	(1,765,998)	1,665,788
Profit/(Loss) attributable to:
Owners of the Bank		7,430,017	6,043,385	(1,765,998)	1,665,788
Non-controlling interests		56,162	9,688
		7,486,779	6,053,073	(1,765,998)	1,665,788
Earnings per share
Basic earnings per share (US cents)		1.44	1.53	(0.34)	0.42

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Profit/(Loss) for the period	7,486,779	6,053,073	(1,765,998)	1,665,788
Other comprehensive income:
ltems that will not be reclassified to profit or loss:
Movement in fair value reserve (FVOCI equity instruments):
- Equity investments at FVOCI - net change in fair value		(408,020)		(408,020)
Related tax		142,807		142,807
		(265,213)		(265,213)
ltems that are or may be reclassified subsequently to profit or loss:
Movement in translation reserve:
- Foreign operations - foreign currency translation differences	(974,533)	(1,078,319)
Movement in fair value reserve (FVOCI debt instruments):
- Debt investments at FVOCI - net change in fair value	1,572,538	(27,718)	1,572,538	(27,718)
- Debt investments at FVOCI - reclassified to profit or loss	39,378		39,378
Related tax	(682,167)	212,706	(682,167)	212,706
Other comprehensive (expense)/income, net of tax	(44,784)	(1,158,544)	929,749	(80,225)
Total comprehensive income/(expense)	7,441,995	4,894,529	(836,249)	1,585,563
Total comprehensive income attributable to:
Owners of the Bank	7,405,710	4,748,805	(836,246)	1,585,563
Non-controlling interests	36,283	145,724
	7,441,993	4,894,529	(836,246)	1,585,563

	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
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
Total comprehensive income
Profit for the period							7,430,017	7,430,017	56,762	7,486,779
Other comprehensive income: Fair value reserve (FVOCI debt instruments): Debt investments at FVOCI - net change
in fair value (net of tax) Debt investments at FVOCI - reclassified					1,150,243			1,150,243		1,150,243
to profit or loss (net of tax) Translation reserve: Foreign operations - foreign translation					(220,494)			(220,494)		(220,494)
differences				(954,055)				(954,055)	(20,478)	(974,533)
Total other comprehensive income			-	(954,055)	929,749			(24,306)	(20,478)	(44,784)
Total comprehensive income				(954,055)	929,749		7,430,017	7,405,711	36,284	7,441,995
Transactions with owners of the Bank Contributions and distributions:
Issue of new shares, net of transaction costs	75,253	4,559						79,812		79,812
Bonus issue of shares	8,426,522	(8,426,522)
Total transactions with owners of the Bank	8,501,775	(8,421,963)			-	-	-	79,812		79,812
Transfer between reserves			520,392			99,502	(619,894)			-
Balance at 30 June 2019	261,221,882	853,810	1,762,903	(6,120,889)	12,642,048	2,936,624	14,494,219	287,790,597	(1,578,970)	286,211,627

	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
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	(2,747,913) (2,747,913)	9,533,453 (41,948) 9,491,505	2,870,270 2,870,270	6,901,064 (8,811,984) (1,910,920)	174,603,833 (8,853,932) 165,749,901	(1,709,475) (68,808) (1,778,283)	172,894,358 (8,922,740) 163,971,618
Total comprehensive income
Profit for the period							6,043,385	6,043,385	9,688	6,053,073
Other comprehensive income: Fair value reserve (FVOCI debt instruments): Debt investments at FVOCI- net change in fair value (net of tax) Fair value reserve (FVOCI equity instruments): Equity investments at FVOCI - net change					184,988			184,988		184,988
in fair value (net of tax) Translation reserve:					(265,213)			(265,213)		(265,213)
Foreign operations - foreign translation differences				(1,078,319)				(1,078,319)	136,036	(942,283)
Total other comprehensive income			-	(1,078,319)	(80,225)			(1,158,544)	136,036	(1,022,508)
Total comprehensive income			-	(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			-
Balance at 30 June 2018	252,720,108	9,278,815	572,162	(3,826,232)	9,411,280	2,841,384	4,197,473	275,194,990	(1,632,559)	273,562,431

	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 2018	252,720,107	9,275,773	1,242,511	758,254	2,681,041	(37,269,073)	229,408,613
Total comprehensive income
Loss for the period						(1,765,998)	(1,765,998)
Other comprehensive income: Fair value reserve (FVOCI debt instruments): Debt investments at FVOCI- net change in fair value (net of tax) Debt investments at FVOCI- reclassified to profit or loss (net of tax) Total other comprehensive income	-	-	-	1,150,243 (220,494) 929,749		l	1,150,243 (220,494) 929,749
Total comprehensive income		-	-	929,749	-	(1,765,998)	(836,249)
Transactions with owners of the Bank Contributions and distributions: lssue of new shares, net of transaction costs Bonus issue of shares Total transactions with owners of the Bank	75,253 8,426,522 8,501,775	9,634 (8,426,522) (8,416,888)					84,887 84,887
Transfer between reserves			520,392			(520,392)	l
Balance at 30 June 2019	261,221,882	858,885	1,762,903	1,688,003	2,681,041	(39,555,463)	228,657,251

	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 period						1,665,788	1,665,788
Other comprehensive income: Fair value reserve (FVOCI debt instruments): Debt investments at FVOCI- net change in fair value (net of tax) Fair value reserve (FVOCI equity instruments): Equity investments at FVOCI - net change in fair value				184,988 (265,213)			184,988 (265,213)
Total other comprehensive income	-	-	l	(80,225)	-	-	(80,225)
Total comprehensive income Transactions with owners of the Bank		-	-	(80,225)	l	1,665,788	1,585,563
Contributions and distributions: Issue of new shares, net of transaction costs Total transactions with owners of the Bank	95,454,545 95,454,545	9,105,702 9,105,702				-	104,560,247 104,560,247
Transfer between reserves			(36,122)			36,122
Balance at 30 June 2018	252,720,107	9,278,815	572,162	(40,672)	2,681,041	(38,670,283)	226,541,170

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Cash flows from operating activities
Interest and commission receipts	38,881,108	38,242,117	15,674,543	20,568,377
Exchange (paid)/received	(1,297,513)	/4,191	(2,149,882)	2,510,881
Interest and commission payments	(15,155,368)	(16,042,190)	(11,177,175)	(11,548,910)
Payments to employees and suppliers	(18,655,650)	(17,019,517)	(10,448,070)	(9,683,153)
Operating profit/(loss) before changes in operating
assets/liabilities	3,772,577	5,254,601	(8,100,584)	1,907,201
(Increase)/decrease in operating assets:
- Trading assets and financial assets at FVTPL		(32,279,397)
- Loans and advances to customers and banks	131,841,110	(137,661,051)	102,074,605	(123,544,863)
- Other assets	1,577,302	4,030,725	(739,642)	(699,477)
Increase/(decrease) in operating liabilities:
- Amounts owed to customers and banks	(45,423,194)	83,800,571	(22,400,253)	152,645,951
- Other liabilities	(774,946)	(300,342)	(566,861)	(3/9,922)
- Net advances from/(to) subsidiary companies			31,922,695	(89,250,686)
Net cash generated from operating activities before income tax	90,992,849	(77,154,893)	102,189,960	(59,321,796)
Income tax (paid)/refunded	(136,991)	(536,369)		994,306
Net cash generated from/(absorbed by) operating activities before income tax
	90,855,858	(77,691,262)	102,189,960	(58,327,490)
Cash flows from investing activities
- Payments to acquire financial assets at FVTPL	(2,469,245)		(2,469,245)
- Payments to acquire shares in subsidiary companies			(5,357,783)
- Payments to acquire shares in other investments		(18,035,210)		(18,035,210)
- Payments to acquire property and equipment	(365,897)	(229,141)	(164,633)	(229,142)
- Payments to acquire intangible assets	(677,791)	(1,277,263)	(675,579)	(1,256,376)
- Proceeds on maturity of debt investments at FVOCI	24,640,828		24,640,828
- Proceeds on disposal of sale of property and equipment	5,151
- Receipt of dividend	3,078,477	3,062,050	3,078,477	3,062,050
Net cash flows from/(used in) investing activities	24,211,523	(16,479,564)	19,052,065	(16,458,678)
Cash flows from financing activities
- Proceeds from issue of share capital	79,811	54,560,248	84,887	54,560,248
- Net movement in debt securities	(21,956,859)	(2,257,214)	(14,834,943)
- Payment of lease liability	(625,300)		(903,092)
Net cash flows (used in)/from financing activities	(22,502,348)	52,303,034	(15,653,148)	54,560,248
Increase/(decrease) in cash and cash equivalents	92,565,033	(41,867,792)	105,588,877	(20,225,920)
Analysed as follows:
- Effect of exchange rate changes on cash and cash equivalents	(1,592,311)	(10,072,880)	(1,567,127)	(8,811,586)
- Net increase in cash and cash equivalents	94,157,344	(31,794,912)	107,156,004	(11,414,334)
Increase/(decrease) in cash and cash equivalents	92,565,033	(41,867,792)	105,588,877	(20,225,920)
Cash and cash equivalents at beginning of period	81,782,001	178,6/6,622	99,006,852	153,393,147
Cash and cash equivalents at end of period	174,347,034	136,808,830	204,595,729	133,167,227

Notes to the condensed interim financial statements

For the six months ended 30 June 2019

Reporting entity 1

FIMBank p.l.c. ("the Bank") is a credit institution domiciled in Malta with its registered address at Mercury Tower, The Exchange Financial and Business Centre, Elia Zammit Street, St. Julian's, STJ3155, Malta. The condensed interim financial statements of the Bank as at and for the six months ended 30 June 2019 include the Bank and its subsidiaries (together referred to as the "Group" and individually as "Group Entities").

The financial statements of the Group as at, and for the year ended, 31 December 2018 are available upon request from the Bank's registered office and are available for viewing on its website at www.fimbank.com.

Basis of accounting 2

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 2018.

The condensed interim financial statements were approved by the Board of Directors on 8 August 2019.

Use of judgements and estimates

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

In preparing these condensed interim financial statements made by management in applying the Group's accounting 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 2018; except for new significant judgements related to lessee accounting under IFRS 16 - Leases, which is described in Note 5.1.

4 Significant accounting policies

Except for changes resulting from the adoption of FRS 16-Leases (see Note 5.1), the significant accounting policies applied by the Group in these condensed interim financial statements are these applied by the Group in its Consolidated Financial Statements as at and for the year ended 31 December 2018.

4.1 Standards issued but not yet effective

A number of new standards and amendments are issued but not yet effective for annual periods beginning on 1 January 2019. These standards are not expected to have a material impact on the Group's Financial Statements.

Changes in accounting policies

Except as described below, the accounting policies applied in these Interim Financial Statements are the same as those applied in the last Annual Financial Statements. The changes in accounting policies are also expected in the Group's Consolidated Financial Statements as at and for the year ending 31 December 2019.

The Group has initially adopted IFRS 16 - Leases from 1 January 2019. A number of other new standards are effective from 1 January 2019 but they do not have a material effect on the Group's Financial Statements.

IFRS 16 - Leases 5.1

IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. Lessor accounting remains similar to previous accounting policies.

The Group has applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in the opening balances of the financial period. Accordingly, the comparative information presented for 2018 has not been restated i.e. it is presented, as previously reported, under IAS 17 - Leases and related interpretations. The changes in accounting policies are disclosed below.

5.1.1 Definition of a lease

Previously, the Group determined at contract inception whether an arrangement was or contained a lease under IFRIC 4 - Determining Whether an Arangement contains a Lease. The Group now assesses whether a contract is or contains a leased on the new definition of a lease. Under IFRS 16, a contract is, or contains, a lease if the control the use of an identified asset for a period of time in exchange for consideration.

On transition to IFRS 16, the Group electical expedient to grandfather the assessment of which transactions are leases. It applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts entered into or changed on or after 1 January 2019.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the contract to each lease component on the basis of their relative stand-alone prices.

5.1.2 As a lessee

The Group leases many assets, including properties and motor vehicles.

As a lessee, the Group previously classified leases as operating or finance leases based on its asses ment of whether the lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for most leases i.e. these leases are on-balance sheet.

The Group presents right-of-use assets that do not meet property in 'property in 'property, plant and equipment', the same line item as it presents underlying assets of the same nature that it owns. The carrying amounts of right-of-use as below.

	Property USD
Balance as at 1 January 2019	2,398,426
Balance as at 30 June 2019	2,496,837

The Group has entered into new lease agreements during the first half of 2019.

The Group presents lease liabilities in 'Other Liabilities' in the Statement of Financial Position.

Significant accounting policies

The Group recognises a right-of-use asset and a lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is remeasured when there is a change in future lease payments anindex or rate, a change in the estimate of the amount expected to be payable under a residual value quarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.

The Group has applied judgement to determine the lease contracts in which it is a lessee that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognised.

Transition

Previously, the Group classified property leases under IAS 17. Some leases include an option to renew the lease for an additional number of years after the end of the non-cancellable period.

At transition, for leases classified as operating lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group's incremental borrowing rate as at 1 January 2019. Right-of-use assured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. The Group applied this approach to all other leases

The Group used the following practical expedients when applying IFRS 16 to leases previously classes under IAS 17.

• applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term.
• · excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
• used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

5.1.3 As a lessor

The Group leases out its investment property, including right-of-use assets. The Group has classified these leases.

The accounting policies applicable to the Group as a lessor are not different from those under IAS 17. However, when the Group is an intermediate lessor the sub-leases are classified with reference to the right-of-use asset arising from the hease, not with reference to the underlying asset.

The Group is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a lessor. However, the Group has applied IFRS 15 - Revenue from Contracts with Customers to allocate consideration in the contract to each lease component.

5.1.4 Impacts on financial statements

Impacts on transition

On transition to IFRS 16, the Group recognised additional right-of-use assets and additional lease liabilities. The impact on transition is summarised below:

	1 January 2019
	USD
Right-of-use assets presented in property, plant and equipment	2,398,426
Lease liabilities	2,398,426

When measuring lease liabilities for leases that were classified as operating lease payments using its incremental borrowing rate at 1 January 2019. The weighted-average rate applied is 5.84%.

Impacts for the period

As a result of initially applying IFRS 16, in relation to the previously classified as operating leases, the Group recognised USD 2,496,837 of right-of-use and USD2,357,795 of lease liabilities as at 30 June 2019.

Also in relation to those leases under IFRS 16, the Group has recognised depreciation and interest costs, instead of operating lease expense. During the six months ended 30 June 2019, the Group recognised USD406,001 of depreciation charges and USD65,686 of interest costs from these leases.

Operating segments o

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

Information about operating segments

Group - June 2019

	Trade
	Finance	Forfaiting	Factoring	Treasury	Real Estate	Other	Total
	USD	USD	USD	USD	USD	USD	USD
External revenue:
Interest income	5,098,861	9,943,630	7,365,621	1,920,000	1,838,823	1,578	26,168,513
Fee and commission Income	2,472,943	3,422,960	2,910,064	576,539	46,775	31,759	9,461,040
Trading income	-	1,015,719	60,448	-	1,183,394	11,257	2,270,818
	7,571,804	14,382,309	10,336,133	2,496,539	3,068,992	44,594	37,900,371
Intersegment revenue:
Interest income			4,202,015	-			4,202,015
Fee and commission income	9,134						9,134
	9,134		4,202,015			-	4,211,149
Reportable segment (loss)/profit before income tax	(7,449,306)	7,936,768	3,740,157	2,402,167	(1,326,075)	235,594	5,539,305

		Trade
	Finance	Forfaiting	Factoring	Treasury	Real Estate	Other	Total
		USD	USD USD	USD	USD	USD	USD
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 2019
	Trade Finance	Forfaiting	Factoring	Treasury	Real Estate	Other	Total
	USD	USD	USD	USD	USD	USD	USD
Reportable segment assets	382,767,082	308,862,662	460,915,254	74,374,930	474,791,404	68,969,248	1,770,680,580
Reportable segment liabilities	1,062,308,212	104,025,431	184,809,987		133,302,627	5,863,799	1,490,310,056
Group - December 2018
	Trade Finance	Forfaiting	Factoring	Treasury	Real Estate	Other	Total
	USD	USD	USD	USD	USD	USD	USD
Reportable segment assets	466,768,405	356,524,958	376,018,913	70,586,340	532,951,218	65,902,353	1,868,752,187
Reportable segment liabilities	1,042,714,722	119,269,700	137,389,275		285,793,082	5,774,590	1,590,941,369

Reconciliation of reportable segment profit or loss

Group

	30 Jun 2019	30 Jun 2018
	USD	USD
Total profit or loss for reportable segments	5,303,712	5,791,007
Other profit or loss	235,594	176,598
	5,539,306	5,967,605
	30 Jun 2019	31 Dec 2018
	USD	USD
Share of loss of equity accounted investees		238,634
Fair value loss on re-measurement of non-current asset held for sale		(2,078,082)
Effect of other consolidation adjustments on segment results	4,109,004	2,872,628
Consolidated profit before income tax	9,648,310	7,000,785

Fair values of financial instruments

7.1 Valuation of financial instruments

The Group has an established control framework with respect to the measurement of fair values. This framework includes reports to the Group's Chief Financial Officer and Executive Management having overseing all significant fair value measurements, including Level 3 fair values. Market exposure to fair value movement is also a key function of the Group's Assets-Liabilities Committee and all valuations of financial instruments are review and approval. Significant valuation issues are reported to the Group's Audit Committee.

The Group measures fair values of an asset or liability using 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 assets or liabilities.

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 assets or liabilities valued market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that 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 assets or liabilities for which the valuation tot based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category also includes assets or liabilities that are valued based on quoted prices 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 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 and estimation. Observable prices and model inputs are usually available in the market for listed debt securities 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 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 overthe-counter structured derivatives and securities for which there is no active market. Valuation models that employ significant unobservable inputs require a higher degree of management 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 Group entity and the counterparty where appropriate.

7.2 Financial instruments measured at fair value – fair value hierarchy

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

Group - 30 June 2019

	Level 1 USD	Level 2 USD	Level 3 USD	Total USD
Assets
Derivative assets held for risk management:
foreign exchange		523,712		523,712
Trading assets			296,207,631	296,207,631
Financial assets designated at FVTPL		53,077	175,762,419	175,815,496
Financial assets designated at FVOCI	62,756,218			62,756,218
Liabilities
Derivative liabilities held for risk management:
foreign exchange		1,274,708		1,274,708

	Level 1 USD	Level 2 USD	Level 3 USD	Total USD
Assets
Derivative assets held for risk management: foreign exchange		92,852		92,852 347,284,967
Trading assets Financial assets designated at FVTPL Financial assets designated at FVOCI	86,608,375	75,524	347,284,967 173,362,850	173,438,374 86,608,375
Liabilities
Derivative liabilities held for risk management: foreign exchange l		2,928,925		2,928,925
Bank - 30 June 2019
	Level 1 USD	Level 2 USD	Level 3 USD	Total USD
Assets
Derivative assets held for risk management: foreign exchange		523,712		523,712
interest rate Financial assets designated at FVTPL Financial assets designated at FVOCI	62,756,218	57,748 53,077	175,762,419	57,748 175,815,496 62,756,218
Liabilities
Derivative liabilities held for risk management: foreign exchange		1,274,708		1,274,708
Bank - 31 December 2018
	Level 1 USD	Level 2 USD	Level 3 USD	Total USD
Assets
Derivative assets held for risk management: foreign exchange interest rate		92,852 16,875		92,852 16,875
Financial assets designated at FVTPL Financial assets designated at FVOCI	86,608,375	75,524	173,362,850	173,438,374 86,608,375
Liabilities
Derivative liabilities held for risk management: foreign exchange		2,928,925		2,928,925

7.3 Level 3 fair value measurements

7.3.1 Reconciliation

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

Group - 30 June 2019

	Financial assets
	Trading	designated at
	assets	FVTP	Total
	USD	USD	USD
Balance at 1 January 2019	347.284.967	173.362.850	520,647,817
Total gains and losses in profit or loss	814,352	78	814,430
Purchases	232,851,530	2,469,245	235,320,775
Settlements	(284,743,218)		(284,743,218)
Effects of movement in exchange rates		(69,754)	(69,754)
Balance at 30 June 2019	296,207,631	175,762,419	471,970,050

Group - 31 December 2018

	Financial assets
	Trading	designated at
	assets	FVTPL	Total
	USD	USD	USD
Balance at 1 January 2018	252.509.144	156,612,036	409,121,180
Total qains and losses in profit or loss	1,649,896	(660,201)	989,695
Purchases	446,850,295	21.092.429	467,942,724
Settlements	(353,724,368)	(3.000.000)	(356.724.368)
Effects of movement in exchange rates		(681,414)	(681,414)
Balance at 31 December 2018	347,284,967	173,362,850	520,647,817

Bank - 30 June 2019

	Financial assets designated at FVTPL USD
Balance at 1 January 2019	173,362,850
Total gains and losses in profit or loss Purchases	78 2,469,245
Effects of movement in exchange rates	(69,754)
Balance at 30 June 2019	175,762,419

Bank - 31 December 2018

	Financial assets designated at FVTPL USD
Balance at 1 January 2018	156,612,036
Total gains and losses in profit or loss	(660,201)
Purchases	21,092,429
Settlements	(3,000,000)
Effects of movement in exchange rates	(681,414)
Balance at 31 December 2018	173,362,850

Trading assets

Financial assets designated at fair value through profit or loss

	Mandatorily	FVOCI debt	Amortised	Total carrying
	At FVTPL	instruments	cost	amount
	USD	USD	USD	USD
Balances with the Central Bank of Malta,
treasury bills and cash			124,891,235	124,891,235
Derivative assets held for risk management	523,712			523,712
Trading assets	296,207,631			296,207,631
Loans and advances to banks			305,748,758	305,748,758
Loans and advances to customers			674,990,682	674,990,682
Financial assets designated at FVTPL	175,815,496			175,815,496
Financial assets designated at FVOCl		62,756,218		62,756,218
Investments at amortised cost			9,848,853	9,848,853
Total financial assets	472,546,839	62,756,218	1,115,479,528	1,650,782,585
Derivative liabilities held for risk management	1,274,708			1,274,708
Amounts owed to banks			306,321,701	306,321,701
Amounts owed to customers			1,089,596,877	1,089,596,877
Debt securities in issue			65,124,514	65,124,514
Total financial liabilities	1,274,708		1,461,043,092	1,462,317,800

	Mandatorily	FVOCI debt	Amortised	Total carrying
	At FVTPL	instruments	cost	amount
	USD	USD	USD	USD
Balances with the Central Bank of Malta, treasury bills and cash			151,910,865	151,910,865
Derivative assets held for risk management	92,852			92,852
Trading assets	347,284,967			347,284,967
Loans and advances to banks		-	325,107,199	325,107,199
Loans and advances to customers			655,724,525	655,724,525
Financial assets designated at FVTPL	173,438,374			173,438,374
Financial assets designated at FVOCl		86,608,375		86,608,375
Investments at amortised cost			9,846,749	9,846,749
Total financial assets	520,816,193	86,608,375	1,142,589,338	1,750,013,906
Derivative liabilities held for risk management	2,928,925			2,928,925
Amounts owed to banks			453,055,327	453,055,327
Amounts owed to customers			1,023,972,887	1,023,972,887
Debt securities in issue			87,081,373	87,081,373
Total financial liabilities	2,928,925		1,564,109,587	1,567,038,512

	Mandatorily	FVOCl debt	Amortised	Total carrying
	At FVTPl	instruments	cost	amount
	USD	USD	USD	USD
Balances with the Central Bank of Malta, treasury bills and cash			124,869,240	124,869,240
Derivative assets held for risk management	581,460			581,460
l oans and advances to banks			296,050,236	296,050,236
Loans and advances to customers			674,290,193	6/4,290,193
Financial assets designated at FVTPL	175,815,496			175,815,496
Financial assets designated at FVOCl		62,756,218		62,756,218
Investments at amortised cost			9,848,853	9,848,853
Total financial assets	176,396,956	62,756,218	1,105,058,522	1,344,211,696
Derivative liabilities held for risk management	1,274,708			1,274,708
Amounts owed to banks			260,047,913	260,047,913
Amounts owed to customers			1,001,398,759	1,001,398,759
Total financial liabilities	1,274,708		1,261,446,672	1,262,721,380

Bank - 31 December 2018

	Mandatorily At FVTPL	FVOCI debt instruments	Amortised cost	Total carrying amount
	USD	USD	USD	USD
Balances with the Central Bank of Malta,
treasury bills and cash			151,891,005	151,891,005
Derivative assets held for risk management	109,727			109,727
l oans and advances to banks		-	321,088,829	321,088,829
Loans and advances to customers		-	725,542,030	725,542,030
Financial assets designated at FVTPL	173,438,374			173,438,374
Financial assets designated at FVOCl		86,608,375		86,608,375
Investments at amortised cost			9,846,749	9,846,749
Total financial assets	173,548,101	86,608,375	1,208,368,613	1,468,525,089
Derivative liabilities held for risk management	2,928,925			2,928,925
Amounts owed to banks			397,913,033	397,913,033
Amounts owed to customers			957,720,771	957,720,771
Debt securities in issue			14,834,943	14,834,943
Total financial liabilities	2,928,925		1,370,468,747	1,373,397,672

9 Net trading results

	Group		Bank
	2019	2018	2019	2018
	USD	USD	USD	USD
Net trading profit from assets held at FVTPL	1.109.056	1,138,786
Foreign exchange rate fluctuations	615,753	(756,604)	596,513	(826,793)
Net income/(loss) on derivatives held for risk management purposes	546,009	1,733,815	(905,262)	3,909,502
	2,270,818	2,115,997	(308,749)	3,082,709

10 Dividend income

'Dividend income' comprise of dividend income from equity investments designated at FVTPL.

11 Derivatives held for risk management

	Group	Bank
	30 Jun 2019	31 Dec 2018	30 Jun 2019	31 Dec 2018
	USD	USD	USD	USD
Derivative assets
Held for risk management
- interest rate			57,748	16,875
– foreign exchange	523,712	92,852	523,712	92,852
	523,712	92,852	581,460	109,727
Derivative liabilities
Held for risk management
– foreign exchange	(1,274,708)	(2,928,925)	(1,274,708)	(2,928,925)
	(1,274,708)	(2,928,925)	(1,274,708)	(2,928,925)

12 Investments in subsidiaries

Impairment assessment

At each reporting date the Bank caries 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 actoring and Egypt Factors reported in the consolidated financial statements are less than their carrying amount, therefore no supairment loss. At the reporting date the Bank assessed the reasonableness of the impairment in subsidiaries. This was caried out on the basis of the underlying performance of each subsidiary during the period under review and with reference to the 31 December 2018 assessment and, in the case of India Factoring, updated to reflect changes in risk appetite for the underlying business during the period. 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.

India Factoring and Egypt Factors

As disclosed in the Financial Statements for the year ended 31 December 2018, 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, updated for India Factoring as stated above, form 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 intial 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 qoodwill.

13 Debt securities in issue

'Debt securities in issue' comprise of promissory notes. At 30 June 2018 promissory notes in issue had a tenor of up to one year. The Group's effective interest rate ranges between 1.30% and 4.78% . 1.30% and 4.75%). The Bank's effective interest rate as at 31 December 2018 was 4.55%.

14 Capital and Reserves

As disclosed in the Directors Report under "Annual General Meeting 2019", during the Annual General Meeting held on 7 May 2019 the Shareholders approved a 1:30 Bonus Issue of Shares through the capitalisation of Share Premium account. This resulted in the allotment of 16,853,044 ordinary shares of USD0.50 each with the corresponding increase in Share Premium.

15 Contingent liabilities

'Contingent liabilities' comprise of guarantee obligations incurred on behalf of third parties. Guarantees issued to subsidiaries amount to USD52,072,914 (31 December 2018: USD64,654,610).

16 Commitments

	Group		Bank
	30 Jun 2019	31 Dec 2018	30 Jun 2019	31 Dec 2018
	USD	USD	USD	USD
Commitments to purchase assets:
Undrawn credit facilities	69,505,646	107,966,535	61,622,042	82,283,205
Confirmed letters of credit	11,441,501	22,988,539	17,370,941	47,220,241
Documentary credits	16,981,365	5,111,809	32,130,426	20,275,337
Risk participations	7,532,985	8,399,339	7,532,985	8,399,339
Factoring commitments	33,771	29,858	252,045	207,898
Commitment to purchase assets	95,073,271	36,610,687
Credit default swaps	28,880,448	7,500,000
Commitments to sell assets:
Commitment to sell assets	(16,000,000)
	213,448,987	188,606,767	118,908,439	158,386,020

Subsidiary companies have confirmed USD23,424,825 (31 December 2018: USD41,609,760) of documentary credits in favour of the Bank.

17 Related Parties

17.1 Identity of related parties

The Bank has a related party relationship with its significant Shareholders, Directors, executive officers and companies forming part of the KIPCO Group. For the purpose of this note, significant shareholders (and their connected parties) holding at least five percent of the issued share capital of the Bank.

Related party transactions carried out by the Bank and its subsidiaries are reported to the Audit Committee which reviews them and assesses their nature.

17.2 Parent, shareholder having significant influence and other related companies

The aggregate values of transactions and outstanding balances related to the parent and subsidiaries of the parent company were as follows:

	Parent		Subsidiaries of parent
	30 Jun 2019	31 Dec 2018	30 Jun 2019	31 Dec 2018
	USD	USD	USD	USD
Assets
Derivative assets held for risk management	9,887,937
Loans and advances to banks		9,881,423	23,524
Loans and advances to customers	53,488,107	53,812,686
Prepayments and accrued income	516,220	523,694
Other assets			14,666
Liabilities
Derivative liabilities held for risk management			34,753	78,100
Amounts owed to banks			4,325,100
Amounts owed to customers	31,021,900	10,036,494	2,658	2,658
Other Liabilities			630
Commitments			44,949

	Parent	Subsidiaries of parent
	30 Jun 2019	30 Jun 2018	30 Jun 2019	30 Jun 2018
	USD	USD	USD	USD
Statements of profit or loss
Interest income	1,124,787	594.919	461,927
Interest expense		(383,192)	(639,665)	(1)
Fee and commission income	20	રેરિક		8,831
Fee and commission expense			(99)
Net loss from other financial instruments
carried at fair value			43,348
Administrative expenses			(308,672)	(27,439)

	Shareholder having		Subsidiary of shareholder		Other related companies
	significant influence		having significant influence
	30 Jun 2019 USD	31 Dec 2018 USD	30 Jun 2019 USD	31 Dec 2018 USD	30 Jun 2019 USD	31 Dec 2018 USD
Assets
Derivative assets held for risk
management
Loans and advances to banks		10,306		34,348,523
Loans and advances to customers					31,041,269	12,600,608
Other assets		858
Prepayments and accrued income				142,999
Liabilities
Derivative liabilities held for
risk management
Amounts owed to banks		65,000,000
Amounts owed to customers					33,186,295	13,944,116
Subordinated liabilities
Other liabilities		630
Accrued and deferred income		99,040
Commitments				14,779,555
	30 Jun 2019	30 Jun 2018	30 Jun 2019	30 Jun 2018	30 Jun 2019	30 Jun 2018
	USD	USD	USD	USD	USD	USD
Statements of profit or loss
Interest income					185,425	38,616
Interest expense		(1,810,806)			(70)	(1,360)
Fee and commission income					12,222	23,021
Fee and commission expense		(40)
Net gain from other financial
instruments carried at fair value		255,014
Administrative expenses		(99,235)				(1,275)

17.3 Other related party transactions

	Other related parties
	30 Jun 2019 USD	31 Dec 2018 USD
Liabilities Amounts owed to customers **	1,157,296	292,397
Accrued and deferred income **	14,116	2,040
	30 Jun 2019	30 Jun 2018
	USD	USD
Statements of profit or loss Interest expense ** Fee and commission expense *	(13,049)	(3,725) (478)

' * ' relates to a company holding shares in a subsidiary of the Group.

' ** ' relates to family members of Directors and Executive Officers of the Group.

17.4 Transactions with key management personnel

Transactions with Directors and Executive Management with those reported in the last Annual Financial Statements.

18 Subsequent Events

On 30 July 2019, Menafactors Limited ('Menafactors') was formally liquidated. Menafactors had ceased its operations and was put into liquidation during 2017. The conclusion of this liquidation will not have a material impact on the financial statements.

19 Comparative Information

Certain comparative figures disclosed in the main components of the financial statements have been reclassified in order to conform to the current year disclosures for the purpose of fair presentation.

Statement pursuant to listing rule 5.75.3

We hereby confirm that to the best of our knowledge:

• · 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
• · the Interim Directors' Report includes a fair review of the information required in terms of Listing Rules 5.75.2 and 5.81 to 5.84.

Murali Subramanian Chief Executive Officer

Ronald Mizzi Chief Financial Officer

Independent auditors' report on review of condensed interim financial statements

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

Introduction

We have reviewed the accompanying condensed interim financial statements of FMBank) 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 2019, and the related condensed interim statements of profit or loss, other comprehensive income, in equity and cash flows for the 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 in accordance with AS 34, Interim Financial Reporting, as adopted by the EU. Our responsibility is to express a 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 the conclusions we have expressed.

Scope of review

We conducted our review in accordance with the Interiew Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial statements consists of marily of persons responsible for financial and accounting matters, and applying analytical and other review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that the accompanying Condensed Interim Financial Statements for the period ended 30 June 2019 are not prepared, in all material respects, in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU.

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

KPMG Registered Auditors

8 August 2019