The Bank of Valletta Group announced pre-tax profits of €143.9 million for the period from October 2016 to September 2017, an increase of 21.5% over the  same period last year.

Last year, the bank had a one-time windfall profit of €27.5 million arising from the takeover of VISA Group, in which BOV is a principal member, by VISA Inc.

This year will be an one-off for Bank of Valletta, as the current financial year consists of 15 months, following a decision to change the financial year end from September 30 to December 31. For comparative purposes, the bank today reported its interim results for the 12-month period October 2016 to September 2017.

BOV chairman Deo Scerri said the bank’s results need to be interpreted in a context of a local economy that has been performing very well, even by comparison to EU standards, but within an international scenario of persistently low interest rates, that continues to pose a significant challenge.

“The bank’s strategic decision to diversify its income sources is yielding results,” he said.

“In fact, we have witnessed satisfactory performance in both our card business and investments. This was neutralised in part by the narrow interest margins and the high liquidity levels. Meanwhile, the bank bore the costs of its increased investment in Human Resources and IT, primarily in relation to the implementation of the programme that will see the Bank changing its core banking systems and onerous regulatory requirements.”

The bank’s more proactive approach towards legacy bad debts resulted in a net reversal of impairment charges equivalent to €7.5 million. Its share of profit from Mapfre MSV Life also increased significantly, going up to €14.5 million (FY 2016: €3.7 million).

Customer deposits continued to increase, reaching a new high of €10.1 billion, in an environment where the preference for short-term deposits persists as the Bank implemented stricter on boarding procedures. Concurrently the group net lending rose slightly and now stands at €4.4 billion, with home loans representing 42% of the bank's total loan book.

 

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