Updated: BOV chairman expresses regret at fund's poor performance

Bank of Valletta chairman Roderick Chalmers this afternoon expressed regret for a property fund’s poor performance.

The La Valette multi-manager property fund was at the centre of controversy earlier this year when a number of investors accused the BOV and its affiliates of mismanagement after the fund’s poor performance left investors reeling.

Mr Chalmers said the bank was doing its best to minimise negative impact on investors.

He steered clear from addressing the serious accusations that were made, warning there was a material difference between the facts and the allegations or innuendos made by the investors.

Mr Chalmers also expressed regret at the approach of some investors who he said tried to question the bank’s integrity.

In his address, Mr Chalmers said that despite tough local and international conditions, the Bank of Valletta Group reported profits before taxation of €98.9 million for the year ended 30th September 2010, an increase of 21% over the previous year. The Board of Directors recommended a final dividend of €0.16 per share which, taken together with the interim dividend of €0.075 per share paid on 28th May 2010, makes for a total gross dividend of €0.235 per share. This dividend will be 2.1 times covered by the post tax profits for the year.

The Board also recommended a bonus issue of 1 share for every 5 shares held, effective 12th January 2011, to be funded by a capitalisation of reserves amounting to €40 million. The bonus issue will serve to further increase the permanent capital base of the Bank from €200 million to €240 million, and will also serve to enhance the affordability and liquidity of the Bank’s shares.

He observed that international regulators were taking steps to secure the long term strengthening and stability of the global banking system - through measures referred to as Basel III. The measures required higher minimum Tier 1 ‘core capital’, while building additional ‘capital conservation’ and ‘counter cyclical’ buffers.

Internal capital forecasts showed Bank of Valletta to be comfortably in excess of the new minimum capital requirements under current Basel III requirements, and an expectation that the Bank will not have to resort to any near term capital raising or dividend constraint measures.

Tonio Depasquale, CEO of Bank of Valletta gave a detailed overview of the bank’s performance during the financial year.

He said that the increase in profits over the previous financial year showed that Bank of Valletta emerged from the financial crisis a stronger institution, one that was ready to face new challenges, and to seek and develop new business opportunities.

Added value deposit products saw customer deposits increase by 9% or €419 million and exceed €5 billion for the first time. This was achieved despite the substantial bond issuance activity during the year.

Public confidence in the group was further consolidated through the overwhelming response of the largest public bond issue ever undertaken by a corporation on the Maltese Islands. Through this issue, Tier II capital was further strengthened by €70 million.

Mr Chalmers and Gordon Cordina were were appointed to the board by the government until the conclusion of the 2011 AGM, whilst Roberto Cassata was appointed by UniCredito until the conclusion of the 2012 AGM. Following the election held at the AGM, the Board of Directors for the forthcoming year will comprise:-

Joseph Borg, Roberto Cassata, Roderick Chalmers (Chairman), Gordon Cordina, George Portanier, Manuel Rizzo, Norman Rossignaud, Paul Testaferrata Moroni Viani and George Wells.