BOV doubles its profit

Bank of Valletta's pre-tax profit has more than doubled, rising to a staggering €81.8 million from €40.6 million last year despite the recession.

In an analysis of its results for the year ended September 30, 2009, the bank said deposits rose by €141 million to €4.8 billion, making it the leader in the domestic and corporate deposit sectors in spite of tough competition and bond activity.

Similarly, loans rose by €207 million to €3.3 billion after the bank approved €261 million in home loans, of which €217 million were withdrawn, after a strong demand in the first-time buyer market.

A further €210 million were used by businesses.

Moreover, income from commission and trading rose by 10 per cent as foreign trade and the cards business were strong while commission boomed in the second half of the year.

On the other hand, the bank said interest received fell by €10.7 million because of the reduction in interest rates by the European Central Bank in an effort to fight the recession.

Similarly, the net operating profit from corporate and retail banking fell by €6.2 million to €86 million from €92.2 million.

Shareholdings in jointly controlled and associated entities resulted in a loss of €9.9 million from a profit of €1.7 million, mainly because of the loss suffered by Middlesea Insurance.

There was also a marginal drop in operating expenses following the introduction of cost control measures taken during the year, particularly with regard to discretionary expense items.

Bank chairman Roderick Chalmers attributed the improvement to a gradual stabilisation of the global financial market in the second half of the year and the provision taken in the first half.

"Both equity and debt markets improved and the more positive tone and sentiment have been sustained... However, the damage to the global economy has been severe and widespread and will take longer to repair.

"Conditions in the... economy remain uncertain and it is to be expected that some deterioration in credit quality will be experienced, particularly should, as is anticipated, the current economic downturn continue into (the next financial year)."