Slight drop in Volksbank profit

Volksbank Malta Group recorded a profit after tax of €5,009,000 for the year which ended December 31, a drop of 2.3 per cent when compared to the profit registered in 2004.

Earnings per share dropped to €2.17 as against €2.21 in 2004.

The group is made up of Volksbank Malta Ltd, VB Finance Ltd and OVAG Finance (Jersey) Ltd. It also forms part of the Osterreichische Volksbanken AG, which is the central institution of the Austrian commercial credit cooperatives with strong international ties.

Net interest income dropped by 4.4 per cent to €7,279,000 mainly as a result of a drop in international loans and advances and increased pressures on margins on these loans.

Administrative expenses, including depreciation, increased further last year by 4.3 per cent to €2,281,000.

On the other hand, the bank also reported an increase in net fee and commission income and a net impairment gain mainly as a result of write-backs of general provisions following a revision in the accounting policy for impairment provisions.

In a statement, managing director Herbert Skok said the bank was placing less reliance on international participations and focusing more on strengthening the local portfolio of products with a view to better serving a number of local market segments which the bank is selectively targeting.

The board of directors paid an interim dividend of €2.036 per share amounting to €4.7 million and is not proposing a final dividend.