Lombard records best year yet

Lombard Bank last year registered what it said was its most successful performance so far, posting a profit before tax of Lm2.54 million - an increase of 18 per cent over 2003.

The bank said that in the financial year ended December 31, 2004, it increased its net interest income to Lm3.67 million while administration expenses of Lm1.93 million were mainly due to anticipated staff costs.

The cost/income ratio at an efficient level of 43.2 per cent compared very favourably with last year's 49.3 per cent and this, it said, despite challenges of economies of scale faced by the bank.

Loans and advances to customers are up by 20 per cent at Lm69.1 million, denoting an appreciable increase in credit activity.

"Continual monitoring of the quality of our lending led to an improvement in net impairment losses on loans and advances," the bank said.

Based on a post-tax profit of Lm1.56 million for the financial year (2003: Lm1.39 million), earnings per share work out at 38c (2003: 34.7c). Shareholders' funds increased by 14 per cent to Lm13.3 million. Return on average shareholders' funds pre-tax increased from 19.8 per cent to 20.4 per cent. Total assets stood at Lm183 million.

The board of directors is proposing a final gross dividend of 15c per share for approval by the annual general meeting. As in previous years, the board will recommend that shareholders be given the option of receiving the dividend either in cash or by the issue of new shares.

Consistent with the bank's policy, the attribution price (at which the new shares to be issued will be determined) has been established as the trade weighted average price of the bank's shares for the three months up to and including February 17.

If approved by the AGM, the dividend will be paid to all shareholders who are registered members on February 28.

The board noted that the strong performance of 2004 continued to prove the solid foundations of the bank's business.

It said that with the commitment of its staff, the loyalty of its customers and continued support of its shareholders, it was well positioned to meet future challenges.