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MFX Manx Financial Group Plc

24.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Manx Financial Group Plc LSE:MFX London Ordinary Share IM00B28ZPX83 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 24.00 23.00 25.00 24.00 24.00 24.00 69,211 08:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Personal Credit Institutions 36.05M 4.67M 0.0405 5.93 27.72M

Manx Financial Group PLC Half-year Report (6406Z)

04/09/2018 7:00am

UK Regulatory


TIDMMFX

RNS Number : 6406Z

Manx Financial Group PLC

04 September 2018

   FOR IMMEDIATE RELEASE                                               4 September 2018 

Manx Financial Group PLC (the "Group")

Unaudited Interim Results for the 6 months to 30(th) June 2018

Jim Mellon, Executive Chairman, commented: "I am pleased to report that the half year continues our progressive growth in profitability and puts us well on the road to the realisation of our strategic objectives. For the first six months of 2018, our profit before tax stands at GBP1.4 million (2017: GBP0.9 million), representing a growth of just over 43% against the same period last year (2017: 30%). Furthermore, our post tax profit increased by 52% to GBP1.2 million (2017: GBP0.8 million). This outcome represents yet another milestone in the history of the Group."

Copies of the Interim Report will shortly be available on our website www.mfg.im

For further information: -

Manx Financial Group - http://www.mfg.im/

Blue Star Business Solutions Limited - http://www.bluestarleasing.com/

Contacts:

Manx Financial Group PLC

Denham Eke, Chief Executive

Tel: +44 (0) 1624 694694

Beaumont Cornish Limited

Roland Cornish/James Biddle

Tel: +44 (0) 20 7628 3396

Britton Financial PR

Tim Blackstone

Tel +44 (0) 7957 140416

Dear Shareholders

Manx Financial Group PLC 2018 Interim Results

Group Overview

I am pleased to report that the half year continues our progressive growth in profitability and puts us well on the road to the realisation of our strategic objectives. For the first six months of 2018, our profit before tax stands at GBP1.4 million (2017: GBP0.9 million), representing a growth of just over 43% against the same period last year (2017: 30%). Furthermore, our post tax profit increased by 52% to GBP1.2 million (2017: GBP0.8 million). This outcome represents yet another milestone in the history of the Group.

This result is a combination of our excellent new business generation throughout our principal operations, supported by a loyal client base who provide and maintain deposits, borrow and utilise our financial advisory services.

But before commenting further on our performance, it is important for shareholders to understand the emphasis both I and the Board place upon corporate governance. In May 2018, we adopted the Quoted Companies Alliance corporate governance code ("QCA") with which we expect to be fully compliant in our reporting for the year-end statutory accounts. In essence, the code has ten principles to aid investors in their understanding of our Group and to help build and develop long term trust and maximise our relationship with shareholders. As Chairman, it is my responsibility to make a clear statement on corporate governance and the value we place upon this. Our full year accounts will provide a detailed explanation of how we observe the QCA, but meanwhile, I am keen for investors to understand our strategic objectives both in the near and longer term.

Our key objectives for 2018

Your Board's fundamental objective remains that of increasing shareholder value, both in a prudent yet progressive manner. Thus, our strategic concentration is to: -

-- Provide the highest quality service throughout our operations to all customers, ensuring that their treatment is both fair and appropriate;

-- Adopt a pro-active strategy of managing risk, especially following the implementation of the International Financial Reporting Standard 9 ("IFRS 9") in full. In doing so, we are committed to regularly review our loan book to allow for any credit impairment resulting from observing strict Expected Credit Loss ("ECL") criteria;

-- Concentrate on developing our core businesses by considered acquisitions, increased prudential lending and augmenting the range of financial services we offer;

-- Implement an enhanced and scalable IT infrastructure to better service the operational requirements of a growing Group without the requirement for a disproportionate increase in headcount;

-- Focus on the liabilities side of our balance sheet by introducing a new treasury management function and structure; and

-- Manage our balance sheet to exceed, as far as possible, the regulatory requirements for capital adequacy, leading to a 20% year-on-year growth in total assets by 31 December 2018 and thereafter.

We implemented the General Data Protection Regulation ("GDPR") on 25 May 2018. This required changes in policy, procedures and technology across the Group to manage how we process and secure data and protect the rights of individuals. Both our Internal Audit and Compliance teams have reviewed the process and will continue to be involved in making sure that the post implementation requirements continue to be met.

We have also instituted an important new position, that of Head of Risk and Compliance, to enhance and monitor our control functions, ensuring that these meet the highest banking standards and are commensurate with the growth in our operations.

Financial Performance

Our operating income increased by 17.8% to GBP6.3 million (2017: GBP5.4 million), despite our net interest income declining by 13.4% to GBP7.4 million (2017: GBP8.6 million), as we re-balanced our loan book to reduce our reliance on business with a disproportionate commission element. Our operating expenses have increased by 10.0% to GBP4.5 million (2017: GBP4.0 million) following the implementation of enhanced risk management and compliance services, coupled with the introduction of a new deposit system and an on-line capability to service loan applications in a more efficient manner.

As I previously mentioned, from this half onwards, we have adopted IFRS 9 in full. The standard covers classification and measurement for financial instruments and also introduces a new ECL model for a regular review of our financial assets and any requirement for impairment. The purpose of the standard is to show the significance of financial instruments in relation to our financial position and performance, explain the nature and extent of risks arising from those financial instruments, both during the period and at the reporting date and, finally, how we manage those risks. We were confident that we would not suffer a meaningful impairment charge to our Income Statement in adopting the standard. In the event, and after evaluating each loan, the total impairment came to GBP0.4 million (2017: GBP0.2 million) which further demonstrates the robustness of our underwriting criteria. The adoption of IFRS 9 has meant that we are required to restate the 2017 Interim and Final figures and I am pleased to report that the re-statement has resulted in a minimal adjustment and we do not expect this to materially change for the full year.

At the half year, our total assets now stand at GBP202.7 million (2017: GBP174.3 million). The growth of over 17% over the same period last year continues to demonstrate the success of our risk management policies in approving loans. Cash and near-cash currently stand at GBP64.7 million (2017: GBP44.3 million), enabling us support the new business growth for further lending opportunities as we expand the regulatory capital base. As a result, shareholder equity has increased by just over 32% to GBP18.5 million (2017: GBP14.0 million) as we progressively reduce the legacy of our retained earnings deficit, now standing at negative GBP2.2 million (2017: negative GBP5.0 million).

Basic earnings per share are up 18% to 0.93 pence (2017: 0.79 pence) and fully diluted earnings per share are up 46% to 0.76 pence (2017: 0.52 pence). On an annualised basis, our return on equity is now 14%, up from 12% against the corresponding period.

Turning to our principal operating subsidiaries: -

Conister Bank Limited (the "Bank")

The Bank's profit before tax stood at GBP1.6 million (2017: GBP0.9 million), an increase of 78%. Total assets have grown by 16% to GBP194.8 million (2017: GBP168.9 million). This is an extremely impressive achievement and reflects well on the executive management. New business generation for the first half was up 48% to GBP13.7 million (2017: GBP9.3 million) and the pipeline for the rest of the year remains strong. Of particular note is our success within the Isle of Man market, especially loans to local Small and Medium-sized Enterprises. Following the opening of our office in Manchester, the Bank's UK loan book continues to expand, both organically and through the application of Indemnified Wholesale Funding Agreements, providing the Bank with additional security against pre-determined lending limits, and Wholesale Funding Agreements to carefully selected counterparties, again against agreed limits. We continue to limit our exposure to the UK unsecured consumer credit market, recognising the uncertainty inherent in this form of lending.

The Bank's loan book stands at GBP131.4 million (2017: GBP123.4 million), a growth of 6% reflecting our move away from lending with excessive commissions payable. The deposit book has increased by 12% to GBP163.7 million (2017: GBP146.2 million). Cash available for lending is approximately GBP48.3 million, against GBP29.6 million in the first half of last year. Successfully managing this cash is an increasingly important function within the Bank and, to this end, we have inaugurated a new treasury management function to ensure that we take full advantage of interest efficiencies and have protection against any adverse change in interest rates. Following the Group's subscription of an additional GBP2.0 million in May 2018 to bring the issued share capital to GBP8.7 million (2017: GBP6.7 million), the Bank's total equity has increased by 18% to GBP20.0 million (2017: GBP17.0 million).

I am pleased to report that the transition to the new deposit system is proceeding smoothly and we have upgraded our lending system to allow for on-line loan applications on a 24/7 basis. Both these initiatives are designed to introduce a level of automation in our operations to allow us to successfully compete with our peers in providing enhanced customer service whilst minimising the need for additional staff.

Importantly, we have invested further in our risk management and compliance functions to maintain the levels of monitoring and control required as our operations expand. The Bank, in line with the rest of the Group, has adopted the QCA code for corporate governance and our compliance with this is regularly reviewed by both our Internal Audit function and by the Audit, Risk and Compliance Committee.

Edgewater Associates Limited ("EWA")

EWA's operating income remains constant at GBP1.3 million (2017: GBP1.3 million). Following the final settlement of the acquisition costs of MBL and Lazenby Knox, profit before tax stands at GBP0.2 million (2017: GBP0.4 million). The reduction in profit is explained by an additional payment following the higher than expected results of the entities acquired which occasioned a cash top-up to the purchase price under the terms of the purchase agreement. Operating expenses of GBP1.0 million (2017: GBP1.0 million) are in line with expectations.

Turning to EWA's Balance Sheet, total assets - including cash of GBP0.7 million - have grown by 26% to GBP3.4 million (2017: GBP2.7 million) and total equity has increased by 35% to GBP2.3 million (2017: GBP1.7 million) - reflecting the success of the merger of the acquisitions.

EWA continues to be the largest IFA on the Isle of Man, with managed assets in excess of GBP300 million and over 13,000 clients supported by 32 members of staff. The executive is to be congratulated in integrating the acquisitions so successfully with minimal client attrition.

Manx FX Limited ("MFX")

MFX has out-performed expectations for the first half, recording a profit before tax of GBP0.3 million (2017: GBP0.1 million), an increase of 200% on a fee income of GBP0.5 million (2017: GBP0.1 million). Total assets, including cash of GBP0.3 million, now stand at GBP0.5 million (2017: GBP0.2 million) and total equity is now GBP0.4 million (2017: GBP0.1 million).

Following this encouraging start to the year, MFX has increased head-count to bolster resilience and allow further business generation and this investment is already producing significant new business.

Outlook

The current uncertainties surrounding the effects of Brexit and potential changes in interest rates will have an impact on credit markets both in the Isle of Man and the UK. Notwithstanding, I believe that the Bank's strategy of asset-backed lending to selected markets will allow us to continue to grow. We are developing new loan products to those entities with significant balance sheets able to both demonstrate affordability and credit resilience.

In conjunction with this, the Bank continues to seek out suitable acquisitions for our strategy of consolidation, particularly in the UK. So far this year, we have acquired 20% of the issued share capital of Beer Swaps Limited, trading as Ninkasi Brewkit Rentals, a relatively new company financing brewery equipment, together with an option to acquire the remaining shares by April 2021. We have also acquired 30% of the issued share capital of PayItMonthly Limited which provides web-based finance solutions to retailers without the need for them to maintain an onerous compliance resource, allowing their customers the option of spreading repayments over one year, together with an option to acquire the remaining shares after August 2021. Over time, we will continue to build our own introducer network, augmented with specialist staff capable of developing this important aspect of our portfolio.

Now that the businesses have fully integrated, EWA has the potential to grow financial advisory services, not only on the Isle of Man but also within the UK. We continue to review suitable acquisitions capable of increasing profitability. EWA not only has a strong new business pipeline, but approximately half of its income derives from renewals. Our only limitation to this growth is the recruitment of qualified advisors. To counter this, we are concentrating on an internal program of staff development which is proving to be a great success.

MFX also has the potential for further growth and, conversely, has the capability of benefitting from any uncertainties in the financial environment as its clients seek the optimum solutions to meet foreign currency exposures.

Thus, I believe that we are well situated to achieve continued expansion which, in turn, will allow us to meet our 2018 strategic priorities. Whilst our organic growth continues to be excellent, any significant growth in our businesses will require further acquisitions, strategic partnerships and the development of specialist products to meet ever-changing market needs. There are, without doubt, numerous opportunities available to us. Each need assessing in terms of risk profile and subsequent reward. Clearly, those opportunities that utilise technology to the full and fit well within our current operations are of the greatest interest. Meanwhile, we remain well-positioned to reporting further success at the year-end.

Finally, and as always, I would like to thank our shareholders for your continued support, our customers and clients for their loyalty, and also our excellent staff for their outstanding efforts in developing the Group.

Jim Mellon

Executive Chairman

4 September 2018

 
   Manx Financial Group PLC 
 

Condensed Consolidated Income Statement

 
                                              For the                          Restated 
                                                    6        Restated           for the 
                                         months ended       for the 6        year ended 
                                              30 June    months ended            31 Dec 
                                                 2018    30 June 2017              2017 
                                               GBP000          GBP000            GBP000 
                                Notes     (unaudited)     (unaudited)         (audited) 
-----------------------------  ------  --------------  --------------      ------------ 
 
 
 Interest income                  2             9,071          10,218            19,893 
 Interest expense                             (1,644)         (1,643)           (3,256) 
 
 
 Net interest income                            7,427           8,575            16,637 
 
 Fee and commission income                      1,781           1,434             3,115 
 Fee and commission expense                   (3,031)         (4,675)           (8,413) 
 
 
 Net trading income                             6,177           5,334            11,339 
 Other operating income                            56              32                91 
 Realised gains on debt 
  securities                                       24              11                36 
 Loss on trading assets                           (1)            (21)              (21) 
 Terminal funding                 4                54               1                90 
 
 
 Operating income                               6,310           5,357            11,535 
 Personnel expenses                           (2,749)         (2,289)           (4,783) 
 Other expenses                               (1,707)         (1,756)           (3,152) 
 Provision for impairment 
  on loan assets                                (365)           (237)             (585) 
 Depreciation                                    (72)           (127)             (134) 
 Amortisation and impairment 
  of intangibles                                (114)            (26)             (286) 
 VAT recovery                     9                45               -                65 
 Change in share of net 
  assets of associate                              19               -                38 
 
 
 Profit before income 
  tax                                           1,367             922             2,698 
 Income tax expense                             (145)           (118)             (240) 
 
 
 Profit for the period 
  / year                                        1,222             804             2,458 
 
 
 
 Basic earnings per share 
  (pence)                         5              0.93            0.79              2.22 
 Diluted earnings per 
  share (pence)                   5              0.76            0.52              1.74 
 
 
 

Condensed Consolidated Statement of Other Comprehensive Income

 
                                                  For the                      Restated 
                                                        6        Restated       for the 
                                             months ended       for the 6    year ended 
                                                  30 June    months ended        31 Dec 
                                                     2018    30 June 2017          2017 
                                                   GBP000          GBP000        GBP000 
                                    Notes     (unaudited)     (unaudited)     (audited) 
---------------------------------  ------  --------------  --------------  ------------ 
 
 
 Profit for the period 
  / year                                            1,222             804         2,458 
 
 Other comprehensive income: 
 
 Items that will be reclassified 
  to profit or loss 
 Debt securities gains 
  / (losses) taken to equity                           10            (19)          (93) 
 
 Items that will never 
  be reclassified to profit 
  or loss 
 Actuarial gain on defined 
  benefit pension scheme 
  taken to equity                                       -               -            30 
                                           --------------  --------------  ------------ 
 
 Total comprehensive income 
  for the period / year 
  attributable to Shareholders                      1,232             785         2,395 
                                           --------------  --------------  ------------ 
 
 Basic earnings per share 
  (pence)                             5              0.94            0.77          2.16 
 Diluted earnings per 
  share (pence)                       5              0.77            0.51          1.70 
 
 

Condensed Consolidated Statement of Financial Position

 
                                                                        Restated          Restated 
                                                     30 June             30 June            31 Dec 
                                                        2018                2017              2017 
                                                      GBP000              GBP000            GBP000 
                          As at    Notes         (unaudited)         (unaudited)         (audited) 
-------------------------------  -------  ---  -------------  ---  -------------  ---  ----------- 
 Assets 
 Cash and cash equivalents                            13,148               6,316             9,745 
 Debt securities                    6                 51,560              37,936            34,272 
 Trading assets                     7                     24                  49                24 
 Loans and advances to 
  customers                         8                130,834             123,408           122,546 
 Trade and other receivables        9                  2,125               2,055             1,908 
 Property, plant and equipment                           515                 661               450 
 Intangible assets                                     2,083               1,364             1,719 
 Investment in associate                                  56                   -                38 
 Goodwill                           10                 2,344               2,344             2,344 
 
 
 Total assets                                        202,689             174,133           173,046 
 
 
 Liabilities 
 Customer accounts                                   163,715             146,245           142,272 
 Creditors and accrued 
  charges                           11                 3,452               3,450             3,164 
 Loan notes                         12                15,971               8,895             8,995 
 Block creditors                    13                   415               1,075               751 
 Deferred tax liability                                   82                  42                42 
 Pension liability                                       560                 573               560 
 
 
 Total liabilities                                   184,195             160,280           155,784 
 
 
 Equity 
 Called up share capital            14                20,732              18,933            20,732 
 Profit and loss account                             (2,238)             (5,080)           (3,470) 
 
 
 Total equity                                         18,494              13,853            17,262 
 
 
 Total liabilities and 
  equity                                             202,689             174,133           173,046 
 

Condensed Consolidated Statement of Cash Flows

 
                                              For the                      Restated 
                                             6 months        Restated       for the 
                                                ended       for the 6    year ended 
                                              30 June    months ended        31 Dec 
                                                 2018    30 June 2017          2017 
                                               GBP000          GBP000        GBP000 
                                          (unaudited)     (unaudited)     (audited) 
---------------------------------    ----------------  --------------  ------------ 
 RECONCILIATION OF PROFIT 
  BEFORE 
  TAXATION TO OPERATING 
  CASH FLOWS 
 Profit before income 
  tax                                           1,367             922         2,698 
 Loss on trading assets                             1              21            21 
 Change in share in net 
  assets of associate                            (19)               -          (38) 
 Gain on disposal of property,                      -             (3)             - 
  plant and equipment 
 Depreciation                                      72             127           134 
 Amortisation and impairment 
  of intangibles                                  114              26           286 
 Decrease in pension liability                      -            (41)          (24) 
 Share-based payment expense                        -              22            22 
 (Increase) / decrease 
  in trade and other receivables                (217)               9           157 
 Increase / (decrease) 
  in trade and other payables                     280             359          (49) 
 
 
 Net cash inflow from 
  trading activities                            1,598           1,442         3,207 
 
 Increase in loans and 
  advances to customers                       (8,288)         (7,479)       (6,617) 
 Increase in deposit accounts                  21,443          20,293        16,320 
 
 
 Cash inflow from operating 
  activities                                   14,753          14,256        12,910 
 

Condensed Consolidated Statement of Cash Flows (continued)

 
            For the                          Restated 
           6 months          Restated         for the 
              ended         for the 6      year ended 
            30 June      months ended          31 Dec 
               2018      30 June 2017            2017 
             GBP000            GBP000          GBP000 
        (unaudited)       (unaudited)       (audited) 
      -------------    --------------    ------------ 
 
 
 CASH FLOW STATEMENT 
 Cash flows from operating 
  activities 
 Cash inflow from operating 
  activities                                  14,753          14,256          12,910 
 Taxation paid                                  (98)               -           - 
 
 
 Net cash inflow from 
  operating activities                        14,655          14,256         12,910 
 
 Cash flows from investing 
  activities 
 Purchase of property, 
  plant and equipment                          (137)            (83)         (122) 
 Purchase of intangible 
  assets                                       (320)               -         (213) 
 Purchase of debt securities                (17,278)        (13,964)        (10,374) 
 Acquisition of MBL and 
  Lasenby Knox business                        (157)            (74)           (239) 
 Sale of property, plant 
  and equipment                                    -              17           20 
 Sale of trading assets                            -               -           24 
 
 
 Net cash outflow from 
  investing activities                      (17,892)        (14,104)        (10,904) 
 
 Cash flows from financing 
  activities 
 Issue of loan notes                           7,226             450             450 
  Repayment of loan notes                      (250)           (100)               - 
 Increase in share capital                         -               -           1,799 
 Repayment of block funding                    (336)           (315)           (639) 
 
 
 Net cash inflow from 
  financing activities                         6,640              35           1,610 
 
 Increase in cash and 
  cash equivalents                             3,403             187           3,616 
                                           ---------       ---------       --------- 
 
 Included in cash flows 
  are: 
 Interest received - cash 
  amounts                                      9,171          10,383          19,109 
 Interest paid - cash 
  amounts                                    (1,635)         (1,590)         (3,152) 
 

Condensed Consolidated Statement of Changes in Equity

 
                                                        Retained 
                                                        earnings 
                                                       and other 
                                      Share capital     reserves      Total 
                                             GBP000       GBP000     GBP000 
---------------------------------    --------------  -----------  --------- 
 
 Balance at 1 January 
  2017                                       18,933      (5,763)     13,170 
 Retrospective impact 
  on initial application 
  of IFRS 9 (see note 1)                          -        (124)      (124) 
                                     --------------  -----------  --------- 
 
 Restated balance at 1 
  January 2017                               18,933      (5,887)     13,046 
 
 Profit for the period                            -          809        809 
 Retrospective impact 
  of applying IFRS 9 to 
  the period (see note 
  1)                                              -          (5)        (5) 
 Other comprehensive income                       -         (19)       (19) 
 
 Transactions with Shareholders: 
 Share-based payment expense                      -           22         22 
 
 Restated balance at 30 
  June 2017                                  18,933      (5,080)     13,853 
                                     --------------  -----------  --------- 
 
 Restated balance at 1 
  July 2017                                  18,933      (5,080)     13,853 
 
 Profit for the period                            -        1,699      1,699 
 Retrospective impact 
  of applying IFRS 9 to 
  the period (see note 
  1)                                              -         (45)       (45) 
 Other comprehensive income                       -         (44)       (44) 
 
 Transactions with Shareholders: 
 Issue of shares                              1,799            -      1,799 
 
 Restated balance at 31 
  December 2017                              20,732      (3,470)     17,262 
                                     --------------  -----------  --------- 
 
 Restated balance at 1 
  January 2018                               20,732      (3,470)     17,262 
 
 Profit for the period                            -        1,222      1,222 
 Other comprehensive income                       -           10         10 
 
 Balance at 30 June 2018                     20,732      (2,238)     18,494 
 

Notes to the Consolidated Financial Statements

   1.       Preparation of the interim statements 

The financial information included in this interim financial report for the six months ended 30 June 2018 is unaudited. The interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The accounting policies have been applied consistently with those presented in the Annual Report for the year ended 31 December 2017 and comply with IFRSs and IFRIC interpretations applicable to companies reporting under IFRS as adopted by the EU.

The Group has adopted IFRS 9 'Financial Instruments' as issued by the IASB in July 2014 with a date of transition of 1 January 2018 which resulted in changes in accounting policies and adjustments to the amounts previously recognised in the financial statements. The Group did not early adopt any of IFRS 9 in previous periods. A number of other new standards are effective from 1 January 2018 but they do not have a material effect on the Group's financial assets.

The changes to accounting policies affected the recognition, classification and measurement of financial assets and financial liabilities and impairment of financial assets. IFRS 9 also significantly amends other standards dealing with financial instruments such as 'IFRS 7: Financial Instruments: Disclosures'.

The changes in accounting policies are also expected to be reflected in the Group's consolidated financial statements as at and for the year ended 31 December 2018.

Set out below are disclosures relating to the impact of the adoption of IFRS 9 on the Group.

   (a)     Classification and measurement of financial instruments 

IFRS 9 largely retains the existing requirements of IAS 39 for the classification and measurement of financial liabilities. However, it eliminates the previous IAS 39 categories for financial assets of held to maturity, loans and receivables and available for sale.

The adoption of IFRS 9 has not had a significant effect on the Group's accounting policies related to financial liabilities. The impact of IFRS 9 on the classification and measurement of financial assets is set out below:

 
                                                  IFRS 9                                          IAS 39 
                                                Carrying                             IAS 39     Carrying 
                                                  Amount                           Carrying       amount 
                                   IFRS 9        30 June                             amount       31 Dec 
                              Measurement           2018              IAS 39        30 June         2017 
                                 category         GBP000         Measurement           2017       GBP000 
                              (unaudited)    (unaudited)            category         GBP000    (audited) 
                                                                   (audited)    (unaudited) 
 
 
 
 Financial 
  assets 
                                                                   Amortised 
 Cash and                       Amortised                        cost (Loans 
  cash equivalents                   cost         13,148    and receivables)          6,316        9,745 
                                    FVOCI                              FVOCI 
                                   - debt                         (Available 
 Debt securities               instrument         51,560           for sale)         32,428       28,740 
                                                                   Amortised 
                                Amortised                         cost (Held 
                                     cost              -        to Maturity)          5,508        5,532 
 Trading assets          FVPL (Mandatory)             24   FVPL (Designated)             49           24 
 Loans and                                                         Amortised 
  advances                      Amortised                        cost (Loans 
  to customers                       cost        130,834    and receivables)        123,408      122,546 
                                                                   Amortised 
 Trade and                      Amortised                        cost (Loans 
  other receivables                  cost          2,125    and receivables)          2,055        1,908 
 
 

Under IFRS 9, on initial recognition, a financial asset is classified as measured at amortised cost; fair value through other comprehensive income ("FVOCI") - debt investment; FVOCI - equity investment; or fair value through profit or loss ("FVPL"). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.

Due to IFRS 9 consolidating measurement categories in IAS 39, the Bank has amended its presentation of the condensed statement of financial position to group financial instruments by type and then identify the nature of the instrument within the notes. In previous annual reports, the nature of the financial instruments was identified on the face of the statement of financial position.

In applying IFRS 9 both in the current period and retrospectively in previous periods, there were no reclassifications in the measurement category. As a result, there has been no financial adjustment in transitioning to IFRS 9 with respect to adopting the revised measurement categories.

   (b)     Credit impairments 

IFRS 9 significantly overhauled the requirements and methodology used to assess credit impairments by transitioning to a forward-looking approach based on an expected credit loss model. The new impairment model applies to financial assets measured at amortised cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognised earlier than under IAS 39.

IFRS 9 outlines a 'three stage' model for impairments based on changes in credit quality since initial recognition as summarised below:

-- A financial instrument that is not credit-impaired on initial recognition is classified in 'Stage 1' and has its credit risk continuously monitored by the Group. Stage 1 assets have their expected credit loss ("ECL") measured at an amount equal to the portion of lifetime expected credit losses that result from default events possible within the next 12 months.

-- If a significant increase in credit risk ("SICR") since initial recognition is identified, the financial instrument is moved to 'Stage 2' but is not yet deemed to be credit-impaired. Financial instruments in Stage 2 have their ECL measured based on expected credit losses on a discounted lifetime basis.

-- If the financial instrument is credit-impaired, the financial instrument is then moved to 'Stage 3'. Financial instruments in Stage 3 have their ECL measured based on expected credit losses on an undiscounted lifetime basis.

After a detailed review, the Group devised and implemented an impairment methodology in light of the IFRS 9 requirements outlined above. More detailed and prescriptive disclosures will be made in the Group's 2018 annual report, but the key assumptions used in the model are as follows:

-- A SICR is always deemed to occur when the borrower is 30 days past due on its contractual payments. If the Group becomes aware ahead of this time of non-compliance or financial difficulties of the borrower, such as loss of employment, avoiding contact with the Group then a SICR has also deemed to occur.

-- A receivable is always deemed to be in default and credit-impaired when the borrower is 90 days past due on its contractual payments or earlier if the Group becomes aware of severe financial difficulties such as bankruptcy, IVA, abscond or disappearance, fraudulent activity and other similar events.

-- The ECL was derived by reviewing the Group's loss rate and loss given default over the past 8 years by product and geographical segment.

-- The Group has assumed that the future economic conditions will broadly mirror the current environment and therefore the forecasted loss levels in the next 3 years will match the Group's experience in recent years.

-- For portfolios where the Group has never had a default in its history or has robust credit enhancements such as credit insurance or default indemnities for the entire portfolio, then no IFRS 9 provision is made. As at 30 June 2018, 36.1% had such credit enhancements (30 June 2017: 42.1% and 31 December 2017: 38.5%).

-- If the Group holds objective evidence through specifically assessing a credit-impaired receivable and believes it will go on to completely recover the debt due to the collateral held and cooperation with the borrower, then no IFRS 9 provision is made.

Impact of the new impairment model

 
                                                                               GBP000 
                                                                          (unaudited) 
----------------------------------  ----  ----  ----  ----  ----  ----  ------------- 
 
 Loss allowance at 31 December 
  2017 under IAS 39                                                                73 
 
 Additional impairment recognised 
  at 1 January 2018 on Loans 
  and Advances to Customers                                                       174 
 
 
 Loss allowance at 1 January 
  2018 under IFRS 9                                                               247 
 
 
   (c)      Group Auditor's review of the restatement 

For the year ended 31 December 2017, the Group's Auditor has audited all figures with the exception of the restatement which has been reviewed prior to issue of these interim statements and will be subject to an audit at 31 December 2018. For the periods ended 30 June 2018 and 2017, the Group's Auditor has reviewed both the figures and the restatement in 30 June 2017.

   (d)     Reconciliation of the primary statements from IAS 39 to IFRS 9 

As a result of the change to the Group's accounting policy in regards to credit-impairments, it has restated the previous periods in accordance with IFRS 9. A reconciliation of the primary statements is as follows:

Condensed Consolidated Income Statement

 
                                                              For the 6            For the 
                                                           months ended         year ended 
                                                                                    31 Dec 
                                                           30 June 2017               2017 
                                                                 GBP000             GBP000 
                                                            (unaudited)          (audited) 
-------------------------------  ----  ----  ----  ----  --------------  ---  ------------ 
 
 Profit for the period / 
  year                                                              809              2,508 
 Increase to provision for 
  impairment on loan assets                                         (5)               (50) 
 
 
 Restated profit for the 
  period / year                                                     804              2,458 
 
 
 Reduction in basic earnings 
  per share (pence)                                                   -             (0.04) 
 Reduction in diluted earnings 
  per share (pence)                                              (0.01)             (0.03) 
 
 
 

Condensed Consolidated Statement of Other Comprehensive Income

 
                                                              For the 6            For the 
                                                           months ended         year ended 
                                                                                    31 Dec 
                                                           30 June 2017               2017 
                                                                 GBP000             GBP000 
                                                            (unaudited)          (audited) 
-------------------------------  ----  ----  ----  ----  --------------  ---  ------------ 
 
 Total comprehensive income for 
  the period attributable to owners                                 790              2,445 
 Increase to provision for 
  impairment on loan assets                                         (5)               (50) 
 
 
 Restated profit for the 
  period / year                                                     785              2,395 
 
 
 Reduction in basic earnings 
  per share (pence)                                                   -             (0.04) 
 Reduction in diluted earnings 
  per share (pence)                                              (0.01)             (0.03) 
 
 
 

Condensed Consolidated Statement of Financial Position

 
                                                            For the 6            For the 
                                                         months ended         year ended 
                                                                                  31 Dec 
                                                         30 June 2017               2017 
                                                               GBP000             GBP000 
                                                          (unaudited)          (audited) 
-----------------------------  ----  ----  ----  ----  --------------  ---  ------------ 
 
 Assets 
 Loans and advances to customers                              123,537            122,720 
 Increase to provision for 
  impairment on loan assets                                     (129)              (174) 
 
 
 Restated loans and advances 
  to customers                                                123,408            122,546 
 
 
 Equity 
 Profit and loss account                                      (4,951)            (3,296) 
 Increase to provision for 
  impairment on loan assets                                     (129)              (174) 
 
 
 Restated profit and loss 
  account                                                     (5,080)            (3,470) 
 
 

Condensed Consolidated Statement of Cash Flows

Total cash flows from operating, investing and financing activities remains unchanged due to the increase in impairments on loan assets being a non-cash item.

Condensed Consolidated Statement of Changes in Equity

For an analysis of the retrospective impact of IFRS 9, see page 8 which analyses in each half year the effect of adopting IFRS 9 for that period.

   1.       Interest income 

Interest income represents charges and interest on finance and leasing agreements attributable to the period or year after adjusting for early settlements and interest on bank balances, excluding the Terminal Funding portfolio.

   2.       Segmental analysis 

Segment information is presented in respect of the Group's business segments. The Directors consider that the Group currently operates in one geographic segment comprising the Isle of Man, UK and Channel Islands. The primary format of business segments is based on the Group's management and internal reporting structure. The Directors consider that the Group operates in five product defined segments in addition to its investing activities: Asset and Personal Finance (including provision of HP contracts, finance leases, personal loans, commercial loans, block discounting, vehicle stocking plans and wholesale funding agreements); Edgewater Associates; Manx FX; Conister Card Services and Manx Incahoot.

 
                          Asset                                            Conister                                                    Total 
                            and 
                       Personal          Edgewater                             Card             Manx           Investing             30 June 
                                        Associates                                          Incahoot                                    2018 
  For the 6 months      Finance             GBP000            Manx         Services           GBP000          Activities              GBP000 
   ended 30 June                                                FX 
   2018 
                         GBP000                             GBP000           GBP000                               GBP000         (unaudited) 
 
 
 Net interest 
  income / 
  (expense)               7,764                  -               -                -                -               (337)               7,427 
 Operating income 
  / (loss)                4,925              1,300             472             (60)               10               (337)               6,310 
 
 Profit / (loss) 
  before tax 
  payable                 1,606                241             332             (61)             (88)               (663)               1,367 
 
 
 Capital 
  expenditure               441                169               3                -                1                   -                 614 
 
 
 Total assets           194,826              2,460             449               49              276               4,629             202,689 
 
 
 
                                                                                                                                         Restated 
                            Asset                                               Conister                                                    Total 
                              and 
  Restated               Personal            Edgewater                              Card             Manx           Investing             30 June 
                                                                                                 Incahoot                                    2017 
   For the 6 months       Finance           Associates            Manx          Services           GBP000          Activities              GBP000 
    ended 30 June                                                   FX 
    2017 
                           GBP000               GBP000          GBP000            GBP000                               GBP000         (unaudited) 
 
 
 Net interest 
  income / (expense)        8,825                    -               -                 -                -               (250)               8,575 
 Operating income 
  / (loss)                  4,225                1,282             124              (53)               29               (250)               5,357 
 
 Profit / (loss) 
  before tax payable          961                  401              47              (51)             (98)               (338)                 922 
 
 
 Capital expenditure           68                   14               -                 -                1                   -                  83 
 
 
 Total assets             169,480                2,024             163                 -              404               2,062             174,133 
 
 
 
                                                                                                                                       Restated 
                             Asset                                              Conister                                                  Total 
                               and 
  Restated                Personal           Edgewater                              Card             Manx           Investing            31 Dec 
                                                                                                 Incahoot                                  2017 
   For the year            Finance          Associates            Manx          Services           GBP000          Activities            GBP000 
    ended 31 December                                               FX 
    2017 
                            GBP000              GBP000          GBP000            GBP000                               GBP000         (audited) 
 
 
 Net interest 
  income                    16,637                   -               -                 -                -                   -            16,637 
 Operating income 
  / (loss)                   8,523               2,625             447             (104)               44                   -            11,535 
 
 Profit / (loss) 
  before tax payable         2,293                 742             249             (104)            (293)               (189)             2,698 
 
 
 Capital expenditure           254                 319               -                 -                1                   -               574 
 
 
 Total assets              168,052               2,252             181                18              307               2,236           173,046 
 
 
 
 
   3.       Terminal funding 

In September 2014, the Bank discontinued funding handheld payment devices (referred to as Terminal Funding) due to the volume of write-offs. Ever since, the book is being run off whilst the Bank vigorously pursues historical write-offs. The Board decided in 2016 to permanently cease funding and wind up the book upon the final repayment date of August 2019.

 
                                                                                        For the 
                                     For the 6 months 
                                                ended             For the 6          year ended 
                                                               months ended 
                                         30 June 2018          30 June 2017         31 Dec 2017 
                                               GBP000                GBP000              GBP000 
                                          (unaudited)           (unaudited)           (audited) 
 
 
 
 Interest income                                   73                   200                 377 
 Fee and commission expense                       (4)                  (53)                (92) 
 Provision for impairment 
  on loan assets                                 (15)                 (146)               (195) 
 
 
                                                   54                     1                  90 
 
 
   4.       Earnings per share 
 
                                                                                     Restated 
                                                                                      for the 
                                               For the 6 
                                            months ended              Restated     year ended 
                                                                     for the 6 
                                                                  months ended 
                                            30 June 2018          30 June 2017    31 Dec 2017 
                                             (unaudited)           (unaudited)      (audited) 
 
 Profit for the period                          GBP1,222                GBP804       GBP2,458 
  / year (GBP000) 
----------------------------  ----  ----  --------------  ---  ---------------  ------------- 
 Weighted average number 
  of ordinary shares in 
  issue                                      131,096,235           102,070,252    110,880,711 
 Basic earnings per share 
  (pence)                                           0.93                  0.79           2.22 
 Diluted earnings per 
  share (pence)                                     0.76                  0.52           1.74 
 
 Total comprehensive income                     GBP1,232                GBP785       GBP2,395 
  for the period / year 
  (GBP000) 
----------------------------  ----  ----  --------------  ---  ---------------  ------------- 
 Weighted average number 
  of ordinary shares in 
  issue                                      131,096,235           102,070,252    110,880,711 
 Basic earnings per share 
  (pence)                                           0.94                  0.77           2.16 
 Diluted earnings per 
  share (pence)                                     0.77                  0.51           1.70 
 
 

The basic earnings per share calculation is based upon the profit for the period / year after taxation and the weighted average of the number of shares in issue throughout the period / year.

 
                                                                        Restated            Restated 
                                                     30 June             30 June              31 Dec 
                                                        2018                2017                2017 
  As at:                                         (unaudited)         (unaudited)           (audited) 
 
 Reconciliation of weighted average 
  number of ordinary shares in issue 
  between basic and diluted earnings 
  per share 
 As per basic earnings per share                 131,096,235         102,070,252         110,880,711 
 Number of shares issued if all convertible 
  loan notes were exchanged for equity 
  (note 12)                                       41,666,667          61,500,000          41,666,667 
 Dilutive element of warrants if taken                     -          12,155,768                   - 
  up 
 Dilutive element of share options                    30,502                   -                   - 
  if exercised (note 14) 
 
 
 As per dilutive earnings per share              172,793,404         175,726,020         152,547,378 
 
 Reconciliation of earnings between 
  basic and diluted earnings per share 
 As per basic earnings per share                GBP1,222,000          GBP804,000        GBP2,458,000 
 Interest expense saved if all convertible         GBP98,075          GBP115,075          GBP196,150 
  loan notes were exchanged for equity 
  (note 12) 
 
 
 As per dilutive earnings per share             GBP1,320,075          GBP919,075        GBP2,654,150 
 
 

The diluted earnings per share calculation assumes that all convertible loan notes, warrants (where applicable) and share options have been converted / exercised at the beginning of the period where they are dilutive.

   5.       Debt securities 
 
                                                          Restated          Restated 
                                       30 June             30 June            31 Dec 
                                          2018                2017              2017 
                                        GBP000              GBP000            GBP000 
  As at:                           (unaudited)         (unaudited)         (audited) 
 
 Financial assets at 
  FVOCI: 
 UK Government treasury 
  bills                                 51,560              32,428            28,740 
 
 Financial assets at 
  amortised cost: 
 Corporate bonds                             -               5,508             5,532 
 
 
                                        51,560              37,936            34,272 
 
 

UK Government Treasury Bills are stated at fair value and unrealised changes in the fair value are reflected in equity. Corporate bonds were held in a UK banking institution with a Fitch credit rating of "A (stable)" and are carried at amortised cost using the effective interest method, less any impairment losses.

   6.       Trading assets 

Trading assets comprise an equity investment in a UK quoted company which has a mandatory classification of a financial asset at FVPL. The investment is stated at market value and is classified as a level 1 investment in the IFRS 13 fair value hierarchy. The cost of the shares was GBP471,000. The unrealised difference between cost and market value has been taken to the condensed consolidated income statement. Dividend income of GBP350,000 and GBP24,000 of sale proceeds have been received from this investment since it was made.

   7.       Loans and advances to customers 
 
                                                                Restated          Restated 
                                             30 June             30 June            31 Dec 
                                                2018                2017              2017 
                                              GBP000              GBP000            GBP000 
  As at:                                 (unaudited)         (unaudited)         (audited) 
 
 Hire purchase                                56,177              62,349            58,582 
 Finance leases                               21,108              16,646            18,987 
 Unsecured personal loans                     13,906               8,608            10,266 
 Vehicle stocking plans                        1,500               1,455             1,613 
 Wholesale funding agreements                  9,747                   -             5,830 
 Block discounting                            17,946              15,241            13,523 
 Secured commercial loans                        403               1,299               655 
 Secured personal loans                       10,047              17,810            13,090 
 
 
                                             130,834             123,408           122,546 
 
 
   8.       Trade and other receivables 
 
                                                                 Restated          Restated 
                                              30 June             30 June            31 Dec 
                                                 2018                2017              2017 
                                               GBP000              GBP000            GBP000 
  As at:                                  (unaudited)         (unaudited)         (audited) 
 
 
 
 VAT claim                                        862                 752               817 
 Prepayments and other debtors                    884                 708               562 
 Commissions receivable                           325                 489               465 
 Depositors' Compensation 
  Scheme receivable                                54                  54                54 
 Monies held in escrow from 
  MBL acquisition                                   -                  52                10 
 
 
                                                2,125               2,055             1,908 
 
 
   9.       Trade and other receivables 

Included in Trade and other receivables is an amount of GBP862,000 (30 June 2017: GBP752,000 and 31 December 2017: GBP817,000) relating to a reclaim of value added tax ("VAT"). The Bank, as the Group VAT registered entity, has for some time considered the VAT recovery rate being obtained by the business as neither fair nor reasonable, specifically regarding the attribution of part of the residual input tax relating to the HP business not being considered as a taxable supply. Queries have been raised with the Isle of Man Government Customs & Excise Division ("C&E"), and several reviews of the mechanics of the recovery process were undertaken by the Bank's professional advisors.

The decision of the First-Tier Tax Tribunal released 18 August 2011 in respect of Volkswagen Financial Services (UK) Limited ("VWFS") v HM Revenue & Customs (TC01401) ("VWFS Decision") added significant weight to the case put by the Bank and a request for a revised Partial Exemption Special Method was submitted in December 2011. The proposal put forward by the Bank was that the revised method would allocate 50.0% of costs in respect of HP transactions to a taxable supply and 50.0% to an exempt supply. In addition, at this time a Voluntary Disclosure was made as a retrospective claim for input VAT under-claimed in the last 4 years. A secondary claim has been made to cover periods Q4 2012 to Q1 2016 for the value of GBP230,000 and an amount of GBP175,000 accrued for periods Q2 2016 to Q2 2018.

In November 2012, it was announced that the HMRC Upper Tribunal had overturned the First-Tier Tribunal in relation to the VWFS Decision. VWFS has subsequently been given leave to appeal and this was scheduled to be heard in October 2013. However, this was delayed, and the case was heard by the Court of Appeal on 17 April 2015 who overturned the Upper Tribunal's decision, ruling in favour of VWFS. HMRC have appealed this decision to the Supreme Court, which has referred the issue to the European Court of Justice ("ECJ"). The Attorney General's opinion has been issued which further supported the Bank's claim, but awaits the full ECJ hearing.

The Bank's total exposure in relation to this matter has increased to GBP975,000, comprising the debtor balance referred to above plus an additional GBP113,000 VAT reclaimed under the partial Exemption Special Method, in the period from Q4 2011 to Q3 2012 (from Q4 2012 the Bank reverted back to the previous method). Based on the discussions and correspondence which have taken place between the Bank and C&E, in addition to the VWFS case, the Directors are confident that the VAT claimed referred to above will be secured.

   9.       Goodwill 
 
                                                    30 June             30 June            31 Dec 
                                                       2018                2017              2017 
                                                     GBP000              GBP000            GBP000 
  As at:                                        (unaudited)         (unaudited)         (audited) 
 
 
 
                Edgewater Associates 
                 Limited                              1,849               1,849             1,849 
                ECF Asset finance PLC                   454                 454               454 
 Three Spires Insurance 
  Services Limited                                       41                  41                41 
 
 
                                                      2,344               2,344             2,344 
 
 
   10.     Creditors and accrued charges 
 
                                            30 June             30 June            31 Dec 
                                               2018                2017              2017 
                                             GBP000              GBP000            GBP000 
  As at:                                (unaudited)         (unaudited)         (audited) 
 
 
 
 Commission creditors                         1,714               2,268             2,042 
 Other creditors and accruals                 1,383                 957               774 
 Taxation creditors                             355                 225               348 
 
 
                                              3,452               3,450             3,164 
 
 
   11.     Loan notes 
 
                                                   30 June             30 June            31 Dec 
                                                      2018                2017              2017 
                                                    GBP000              GBP000            GBP000 
  As at:                        Notes          (unaudited)         (unaudited)         (audited) 
 
 
 Related parties 
 J Mellon                                JM          1,750               1,750             1,750 
 Burnbrae Limited                        BL          1,200               1,200             1,200 
 Southern Rock Insurance 
  Company Limited                        SR            460                 460               460 
 Life Science Developments 
  Limited                                LS              -                 250               250 
                                                     3,410               3,660             3,660 
 Unrelated parties                       UP         12,561               5,235             5,335 
 
 
                                                    15,971               8,895             8,995 
 
 

JM - Two loans, one of GBP500,000 maturing on 31 July 2022 with interest payable of 5.0% per annum, and one of GBP1,250,000 maturing on 26 February 2020, paying interest of 6.5% per annum. The loans are convertible at the rate of 7.5 pence and 9 pence respectively.

BL - One loan consisting of GBP1,200,000 maturing on 31 July 2022 with interest payable of 5.0% per annum. Jim Mellon is the chairman and beneficial owner of BL and Denham Eke is a director. The loan is convertible at a rate of 7.5 pence.

SR - One loan consisting of GBP460,000 maturing on 26 February 2020 with interest payable of 6.5% per annum. The loan is convertible at a rate of 9 pence. Arron Banks is the beneficial owner of SR. John Banks, a Non-executive Director, is a director of SR.

LS - One loan of GBP250,000 matured on 3 January 2018 with interest payable of 5.0% per annum. Denham Eke is a director of LS.

UP - Thirty four loans consisting of an average GBP369,441, with an average interest payable of 5.4% per annum. The earliest maturity date is 2 July 2018 and the latest maturity is 30 May 2023.

With respect to the convertible loans, the interest rate applied was deemed by the Directors to be equivalent to the market rate with no conversion option.

   13.     Block creditors 
 
                                                  30 June             30 June            31 Dec 
                                                     2018                2017              2017 
                                                   GBP000              GBP000            GBP000 
  As at:                                      (unaudited)         (unaudited)         (audited) 
 
 
 
 Drawdown 2 - repayable 25/07/2018, 
  interest payable at 5.6%                             15                 172                95 
 Drawdown 3 - repayable 29/03/2019, 
  interest payable at 6.3%                            400                 903               656 
 
 
                                                      415               1,075               751 
 
 
   14.     Called up share capital 
 
 Ordinary shares of no par value           Number 
  available for issue 
-----------------------------------  ------------ 
 At 30 June 2018, 31 December 2017 
  and 30 June 2017                    200,200,000 
-----------------------------------  ------------ 
 
 
 Issued and fully paid: ordinary         Number   GBP000 
  shares of no par value 
---------------------------------  ------------  ------- 
 At 30 June 2017                    102,070,252   18,933 
 At 30 June 2018 and 31 December 
  2017                              131,096,235   20,732 
---------------------------------  ------------  ------- 
 

There are four convertible loans totalling GBP3,410,000 as at 30 June 2018 (30 June 2017: GBP3,410,000 and 31 December 2017: GBP3,410,000) with no remaining warrants to exercise (30 June 2017: 28,333,333 and 31 December 2017: nil). See note 12 for further details. There are no outstanding warrants in issue at 30 June 2018 (30 June 2017: 36,666,666 and 31 December 2017: nil).

On 23 June 2014, 1,750,000 share options were issued to Executive Directors and senior management within the Group at an exercise price of 14 pence. The options vest over three years with a charge based on the fair value of 8 pence per option at the date of grant. The period of grant is for 10 years less 1 day ending 22 June 2024. Of the 1,750,000 share options issued, 1,050,000 (30 June 2017 and 31 December 2017: 1,050,000) remain outstanding with the balance lapsed.

   15.     Regulators 

The Group is regulated by the Isle of Man Government Financial Services Authority licensed to undertake banking activities and conduct investment business. In addition, the Group is regulated by the Financial Conduct Authority in the United Kingdom for credit and brokerage related activities.

   16.     Contingent Liabilities 

The Bank is required to be a member of the Isle of Man Government Depositors' Compensation Scheme which was introduced by the Isle of Man Government under the Banking Business (Compensation of Depositors) Regulations 1991 and creates a liability on the Bank to participate in the compensation of depositors should it be activated.

   17.     Post balance sheet events 

There were no significant post balance sheet events.

   18.     Approval of interim statements 

The interim statements were approved by the Board on 24 August 2018. The interim report will be available from that date at the Group's website - www.mfg.im and at the Registered Office: Clarendon House, Victoria Street, Douglas, Isle of Man, IM1 2LN. The Group's nominated adviser and broker is Beaumont Cornish Limited, 2nd Floor, Bowman House, 29 Wilson Street, London, EC2M 2SJ. The interim and annual reports along with other supplementary information of interest to shareholders, are included on the Group's website. The website includes investor relations information and contact details.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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