Profits at the financial services group which includes Conister Bank and Edgewater Associates, have risen in the latest published results.

Jim Mellon is executive chairman of Manx Financial Group, whch has presented its interim results for the six months ended June 30.

Mr Mellon said: ’With pre-tax profit up by 30 per cent to £0.9 million and total assets increasing by nearly 17 per cent to £174.3 million, our results are extremely encouraging and for the first six months of the year substantial and sustained progress has been made throughout the Group.’

As well as Conister and Edgewater, the Manx Financial Group also includes Conister Card Services Ltd, Manx Incahoot Ltd and Manx FX limited.

Here are some points from the report.

Conister Bank

The report notes that Conister Bank’s net interest income has increased to £8.8 million (2016: £7.5 million), a growth of 17 per cent ’and is a testament to the excellence of our sales teams and a reflection of a robust new business pipeline developed over the last nine months, underpinned by steady and favourable borrowing interest rates.

’Yet again, our Isle of Man direct lending has beaten our expectations with a consistent monthly new business figure in excess of £1.5 million, which has continued throughout the first half and beyond.

’Also, our direct lending into the UK market continues to perform well, by more than trebling business underwritten from this source in the last 12 months.’

David Gibson has been welcomed as chairman of the Bank in succession to Neil Duggan, who retired following the conclusion of his contract.

The rerport notes that ’David has been an independent non-executive director of both the Group and Bank since 2008 and brings to the position a wealth of experience and strategic direction which will serve us well for the future.

’We wish Neil a long and happy retirement and thank him for his significant contribution to the Group and Bank.

’In announcing this change, I would also like to welcome two further appointments: Douglas Grant to the position of managing director, and James Smeed as financial director in succession to Douglas.’

Edgewater Associates

The report talks about Edgewater (EWA).

’Following the acquisition of the books and certain of the staff from Knox Financial Services Limited in December 2016 and January 2017, EWA has now established itself as the largest independent financial advisor on the Isle of Man.

’I am pleased to report that not only are we well along the path of integrating the new businesses into our various platforms, but also the financial impact on profitability is tangible and exceeds our original expectations.

’At the six-month point, our operating income has grown to £1.3 million (2016: £0.7 million), a growth of just over 91 per cent.

’Despite the anticipated increase in personnel expenses to £0.5 million (2016: £0.3 million) and administration expenses to £0.4 million (2016: £0.2 million), the enlarged EWA profit for the period is £0.4 million (2016: £0.2 million) - a commendable increase of 157 per cent.

’Of further note is the profitable development of EWA’s general insurance brokerage, now able to offer competitive cover to both businesses and individuals on the Isle of Man.

Manx FX Limited (MFX)

The chairman says he would also like to make mention of a relatively new venture, MFX, ’whereby we provide a consultancy to businesses requiring access to foreign exchange dealing at rates considerably more competitive than those offered through the traditional banking market.

’In providing this service, we are insulated from any foreign exchange exposure as any currency fluctuation risk remains entirely with the companies we advise.

’After a slow start, I am pleased to report that MFX generated an operating income of £0.1 million in the first half, a figure considerably in excess of our initial expectations to this point.’

Outlook

Here is part of Mr Mellon’s outlook for the Group.

He writes: ’Post period, I am pleased to announce that, following a sale of warrants by my own interests, we have increased the regulatory capital available to the Group by just over £1 million.

’The sale was made to a party connected to me, namely Dr Greg Bailey, and our intention is to invite him to join the Group board as soon as the regulatory formalities have been concluded.

’A further announcement about this appointment will be made in due course.

’In addition, both I and interests connected to Arron Banks, a major shareholder, have informally and independently indicated to the Group that we are prepared to make available non-dilutive regulatory capital in the form of qualifying unsecured loans on an arms-length basis to support further lending growth within the Bank.

’Our future strategy is to develop our existing product base to its fullest extent, while introducing new products with appeal to targeted market sectors.

’I have indicated that our new business pipeline is stronger than it has ever been and we are working hard to minimise the time taken to convert this pipeline into actual loans, but always with the consideration that our underwriting must be both prudent but commercial.

’In addition to this, we are always on the lookout for suitable acquisitions to augment our portfolio.

’The financial services market is experiencing a period of change and consolidation and there are a number of opportunities available to us.

’The Group Board has considered alternative methods of financing appropriate and suitable acquisitions on a non-dilutive basis and we are considering entering the bond market as a potential source of new capital.

’We believe that only now have we both the track record and scale to access alternative finance on reasonable terms, and that the previous limitations to regulatory capital growth are behind us.

’In short, our trading prospects for the full year are extremely encouraging.

’As a consequence, we will take the opportunity in the next six months to undertake a further strengthening of the Group’s Balance Sheet.

’I would like to thank our shareholders and staff for their loyalty to the Group as we continue to consolidate and grow our various businesses.’

www.mfg.im

Jim Mellon