MSV LIFE TOP ENTREPRENEUR AWARDS 2014 EXCLUSIVE INTERVIEW
players in this field had withdrawn their support to shore-up heavy losses sustained in other areas of their activities. Established commodity traders started finding it difficult to source financial support for their activities and sought alternatives. Small banks like IIG Bank stepped in to fill this gap. Like any other business, banking should be driven by those specialist skills and resources that can make a difference, by a commitment to provide a quality service and of course, by identifying the opportunity. IIG Bank has thrived by focusing on these fundamental factors. TEU: What can you tell us about your performance in 2013/14?
RB: The year ended 31 December 2013 was another very positive year for IIG Bank. Not only did the Bank’s balance sheet grow by over 40%, from $78.5 million to $111 million, but during the year, the Bank managed to expand its business of trade finance into new geographical areas and new industries. During the second half of 2013 the Bank started to develop its operational capabilities to support this new business and we are excited about the response we have generated so far in these new markets. During 2013, the Bank generated total revenues before tax of $1,827,462 up from $1,449,174 in 2012, made up of $1,005,910 in operating profit before tax and $821,552 in net gains on financial assets. TEU: Can you tell us about IIG Bank’s clientele and how has the game plan turned out for your company? RB: Like every other bank, IIG Bank clients fall under two basic categories, the depositors who place their trust in the bank to protect their hard earned savings and to achieve a return, and the borrowers, who while seeking finance for their business activities, place their trust in the capabilities of professional people to grow their business. The key word is trust. We are happy to say that on the depositor side, we attract medium to high net worth individuals with a minimum start-up deposit of EUR25,000 or the equivalent in USD and GBP. Deposits have more than doubled over the past year reaching a figure of USD90 million
as at end of March 2014. What is most meaningful to us is the retention rate of existing client deposits, which is close to 90%. Driven by this level of support, during 2013 the Bank embarked on the second phase of its business plan, which consists in the direct marketing and development of borrowing trade finance clients. Given the opportunity already mentioned, the Bank has also been very successful in sourcing such business from established commodity traders.
We believe that there is ample space for small banks that specialise in the area of international trade finance to thrive, especially banks that are quick and agile enough to grab the opportunities that characterise the international trade sector TEU: How would you describe the current state of banking sector?
RB: The domestic banking sector has proven to be sound and now that the worst of the crisis seems to be over, it is showing slow but sustainable growth, despite the challenges and restraints of new regulation. Internationally, banks are still striving to restore the trust that they once enjoyed, while there are those that still need to provide heavily for nonperforming assets on their balance sheets.
despite your success, which may lead to complacency?
RB: IIG Bank is still a very young institution and there is no space for complacency now or at any other time in the future. Being successful in achieving periodic goals is very important, but these must be seen as stepping stones along the road of longer term development objectives. IIG Bank is fully committed to develop and it has the full support of its shareholder to do so. The Bank reinvests all the annual revenues into its core capital to sustain its continued development. We believe that there is ample space for small banks which specialize in the area of international trade finance to thrive, especially banks that are quick and agile enough to grab the opportunities that characterise the international trade sector. In a world where economies continue to struggle, demand for basic commodities is not diminished. We are therefore positive that our loan assets will continue to expand in this direction while developing through geographical diversification. TEU
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TEU: Looking at the challenges ahead, do you believe that trade finance, and the soft commodity sector, continues to be resilient despite market uncertainty?
RB: The flow of cross border trade is the life blood of every country. The financing and facilitation of such activity is critical especially in the soft commodity sector, which essentially consists of trade in all those basic products that satisfy the basic needs of every nation on Earth. There is little correlation between trade flows and the financial markets, other than a general slowdown when economies are so hardly hit as to effect demand for consumer products. The challenges to trade finance are more directly related to strife, sanctions and other causes and effects that disrupt the free trade and movement of goods. TEU: How critical is it to maintain the culture of innovation within the bank,
Editor’s Note IIG Bank (Malta) Ltd is based at Portomaso, St Julians and has been established in Malta since March 2010. IIG Bank has quickly earned a reputation of a trustworthy financial institution offering best-in-class rates of return to its customers. The Bank is an affiliate of the International Investment Group LLC, an established global trade finance manager based in New York specialising in the global commodity trade sector with a focus on the emerging markets. IIG Bank is a fully licensed credit institution regulated by the Malta Financial Services Authority and is a participant in the Depositor Compensation scheme.
April 2014 | THE ECONOMIC UPDATE
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