LONDON (Alliance News) - Manx Financial Group PLC on Friday reported a stable profit for 2018 as the financial services firm announced it is considering a payout for shareholders in 2020 and beyond.
In 2018, the Isle of Man lender's pretax profit was broadly flat at GBP2.7 million with net interest income decreasing 6.0% to GBP15.6 million from GBP16.6 million the year before.
The financial services company's loans & advances to customers increased 22% to GBP148.3 million with deposits from customers increasing 11% to GBP158.5 million.
"I am pleased to announce that the outcome for 2018 showed a broadly similar profit to 2017, despite the figures including the expense of further investments in infrastructure, the most important being the opening of a new UK full-service HQ in Newbury and a significant upgrade in our IT infrastructure," said Executive Chair Jim Mellon.
The company's core business, Conister Bank, achieved "excellent" new business generation. The bank's net interest income increased 13% to GBP12.8 million with total new lending jumping 39% to GBP102.1 million.
Manx Financial said Conister Bank made "significant inroads" into the UK commercial sector, while increasing its lending in the Isle of Man.
The group's financial advice firm, Edgewater Associates, saw its profit drop 71% to GBP200,000 on a flat fee income of GBP2.6 million. An "unexpected change" in UK legislation led to a "temporary halt" in Edgewater Associates' service pension transfers to Isle of Man customers in the second half of the year.
Manx Financial said: "The underlying business continues to experience considerable excess demand, but is limited by the difficulty of recruiting suitably qualified advisors. Notwithstanding, Edgewater Associates remains the Isle of Man's largest IFA. We remain encouraged by the opportunities available for this important part of the group's business and I am pleased to note that we have already seen a meaningful improvement in profitability from the beginning of 2019."
Manx FX, the company's foreign exchange and international payment processing firm, saw its profit increase fivefold to GBP500,000 due to its low-cost structure and a "relatively" small increase in income.
Manx Financial did not pay a dividend in 2018, with the company noting the "conflicting demands of utilizing shareholder equity as the regulatory platform to support growth versus the compounded cost of a dividend payment".
The company is "considering potential arrangements" it considers to be a benefit to shareholders without reducing the company's "potential to reach the scale whereby the group becomes capable of self-generating regulatory capital".
Manx Financial said it is unlikely any payout scheme will be put in place in 2019 but may implement one after depending on the company's performance.
Mellon added: "We have continued to strengthen our balance sheet and our new business pipeline remains buoyant for all our core activities. As a result, we are in an excellent position to report further success, both at the Interims and at the full year."
Shares in Manx Financial were untraded Friday but last closed at 8.60 pence each.
Manx Financial (MFX)