(Alliance News) - Axiom European Financial Debt Fund Ltd on Wednesday said net asset value per share was down, as it swung to a loss amid rising inflation and interest rates.

The investor in subordinated debt market of European banking and financials sector said NAV per share at December 31 was 92.43 pence, down 14% from 105.15p a year ago.

Net assets fell 12% to GBP84.9 million, from GBP96.6 million.

NAV total loss was 6.4%, swinging from a return of 16.9% a year ago. Axiom said it saw a positive NAV return of 0.8% in the second half of the year, "partly clawing back first half deficit". The company said the loss reflected tough market conditions due to rising inflation and interest rates.

The company said loss per share was 6.72p, swinging from earnings per share of 16.05p at December 31 2021.

Axiom said it has made an "encouraging" start to 2023, seeing positive returns in the first two months.

The company said the total dividend was 6.00p per share, with four dividends of 1.50p having been declared during the year, unchanged from the year prior.

Chair William Scott said: "The outlook for our strategy is now more positive. Rising interest rates are in general good for banks, enabling wider spreads between lending and deposit rates and we have seen robust performances from banks as they have reported their results.

"Returns on equity have been strong, interest margins widened, and non-performing loans have remained at low levels."

Axiom shares fell 9.3% to 78.00 pence each in London at close on Wednesday.

By Harvey Dorset, Alliance News reporter

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