Bank plans to implement a cost reduction program
BNK Banking Corporation has announced its financial results for the first half of 2024, revealing a mix of growth and challenges in a competitive market.
The bank reported a cash net profit after tax of negative £1.2 million, a slight improvement of £0.2 million from the previous corresponding period.
However, its net interest income saw a decline of 1.1% to £8.6 million due to increased competition affecting loans and deposits. The direct net interest margin decreased by 0.31% to 1.01%, also attributed to the competitive landscape.
Despite this, BNK Bank, in its results announcement, highlighted significant growth in its loan and deposit books, both reaching record highs of £1.5 billion, up 26.8% and 30.9% respectively. The bank also noted a substantial 400% increase in higher-margin lending, which now stands at £175 million.
Operating expenses fell by 13% to £9.9 million, reflecting the bank’s continued emphasis on cost discipline. This, combined with the growth in its loan and deposit portfolios, contributed to the improved net cash profit.
“BNK has achieved solid growth in our higher-margin business loan portfolio hitting record highs in both our loan and deposit books despite challenging market conditions for the banking sector,” said Allan Savins (pictured), chief executive at BNK Banking Corporation.
“Our net cash profit for the first half has improved due to the growth in our deposit and loan books and our disciplined approach to cost reduction.
“However, it is important to acknowledge that like our competitors, BNK is not immune to the pressures on our business from increased interest rates putting pressure on our margins amid fierce competition for loan and deposit customers.”
Looking ahead, BNK is set to implement a cost reduction program expected to save approximately £1.6 million annually. This includes structural realignment and a reduction in workforce.
The bank aims to navigate the ongoing economic challenges, anticipating continued competition but also opportunities for margin improvement.
“We hold confidence in achieving our fiscal year 2024 annual target, aiming for 20% of total settlements in higher-margin assets,” Savins said.
“Strategically, we will persist in exploring opportunities in new deposit and asset classes, alongside considering inorganic growth and distribution partnerships where appropriate.”
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