“Despite the significant and unprecedented challenges posed by COVID-19 on its clients, employees and communities in which it operates, we accelerated the implementation of our business strategy of diversifying the balance sheet and delivering long-term profitable growth as a pan-European retail digital challenger bank,” says CEO of MeDirect Group Arnaud Denis, reacting to the company’s dynamic franchise growth in 2020, despite the pandemic.
“Our goal is to make digital investing simple and convenient for everyone, offer best-in-class user experience and an innovative wealth value proposition, with a specific focus on addressing needs of the underserved mass affluent and affluent customer segments,” Mr Denis continues.
Despite 2020 profitability being adversely affected, the MeDirect Group has remained resilient and operates with strong capital and liquidity ratios, well in excess of regulatory requirements.
“Against this extraordinary backdrop, the Group is proud of the way it responded to the COVID-19 pandemic, prioritising supporting its clients, protecting its people, preserving capital and ensuring the ongoing future value of the business by continuing to invest in the Bank’s platform with a clear strategic intent. The Group demonstrated that MeDirect is a strong, resilient and agile organisation, able to protect the interests of all its stakeholders in such a challenging operating environment,” the CEO notes.
MeDirect continued to implement new digital solutions during 2020, including the launch of its mobile app, a revamped online e-banking platform and a fast and convenient digital onboarding process. The Group is also further diversifying its lending portfolio with strong risk management.
2020 was a year of steady growth in the Group’s Dutch government supported (NHG) mortgage business, as the Group’s Belgian banking subsidiary built a portfolio of €1.1 billion as of 31 December 2020. MeDirect Group continued to grow its client base at a steady pace throughout 2020, with an increase of 13 per cent, from 67,000 to 76,000. MeDirect Belgium grew its client base by 20 per cent – from 43,000 to 52,000.
In Malta, MeDirect continued to support the Maltese real economy through lending to Maltese corporates and small and medium-sized enterprises. Corporate lending portfolio remained stable and stood at €88.2 million as of 31 December 2020. In response to the COVID-19 pandemic and its effect on Maltese businesses, MeDirect Malta launched its MeAssist lending product, an assistance package issued in collaboration with the Malta Development Bank, which aims at supporting and enhancing access to bank financing for corporate customers.
In early 2021, MeDirect has also launched its new home loans product in the Maltese market, thus widening its retail service offering.
In 2020 there was further investment in WealthTech and diversification of the balance sheet, while regulatory ratios remained strong despite significant COVID-related losses. The balance sheet increased by 29 per cent in 2020, from €3.1 billion to €4 billion. This was principally driven by the increase in the NHG portfolio.
As a result of prudent COVID-related impairments, MeDirect Group reported a loss before tax of €75.2 million in the financial year ended 31 December 2020, compared to a profit before tax of €7.1 million in previous period. Even after having absorbed COVID-related impairments, the Group’s capital ratios remained strong, with the Tier 1 capital ratio at 14.8 per cent and the total capital ratio at 17.3 per cent, well above its regulatory capital requirements.
Meanwhile, the Group’s liquidity reserves remained strong, with a liquidity buffer of €685 million as of 31 December 2020.
“Our Group enters 2021 with renewed confidence that its transformation plan, high-calibre staff and cutting-edge innovation will enable it to continue to build a digital challenger bank with a promising future,” the CEO concludes.
MeDirect Bank Malta / LinkedIn
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