Bank of Valletta wanted to extend the return on its investment in House of Four Winds over more years, Bank of Valletta chairman John Cassar White said, justifying the decision to extend its agreement with the government to 65 years.
He also stressed that a lease did not give as many rights as an emphyteusis.
He was replying to questions at the annual general meeting from a shareholder, Guido Bonnett, who asked him to justify the bank’s decision to pay the government €4.6 million to extend its lease of the House of Four Winds to a temporary emphyteusis of 65 years. The story had appeared in The Business Observer on December 4.
The bank had invested a considerable amount in the total renovation of the site
He said that the amount paid for the change in the agreement was based on valuations by the government’s architect as well as the bank’s own.
Mr Cassar White said that the bank had invested a considerable amount in the total renovation of the site, which it had taken in “exchange” for offices it occupied near the Old Opera House. The original lease was signed in 2010 for 30 years.
He also announced that the building opposite its main office in Sta Venera, for which it recently got a permit, would be used for its wealth management clients.
BOV is also concluding discussions with the regulator and consumer representatives with a view to introducing an online trading platform, which could be completed within the coming months.
Mr Cassar White told the shareholders gathered at the Hilton for the bank’s AGM yesterday that the platform would be designed to ensure that investors had all the information that they required to help them make appropriate decisions.
Following approval of another resolution, KPMG took over as auditors, replacing Deloitte which has held that role for several years.
The Bank of Valletta Group registered a pre-tax profit of €104.1 million for the financial year ended September 30, 2014, down from €115.8 million registered in the previous year.
The shareholders approved a final gross dividend of €0.0925 per share, which taken together with the gross interim dividend of €0.0425 per share paid in May of this year, makes for a total gross dividend of €0.135 per share for FY2014.
The total dividend for the year represents a gross yield of 6.05 per cent by reference to the closing share price of €2.23 per share at September 30, 2014 and a net dividend cover of 2.4 times.
Paul Testaferrata Moroni Viani, who has been on the board since 2007, did not contest this year’s election. From the 2013 board, Joe Zrinzo, Mario Grima and Joe Borg recontested, while George Wells and Franco Xuereb did not.
George Portanier, who was first appointed to the board in 1992 but was not elected last year, also contested.
New contestants were Alicia Agius Gatt, James Grech and Nigel Scerri. Six of the seven contestants were to be elected last night.
Roberto Cassato and Deo Scerri were re-appointed by shareholders Uni Credit and the government respectively.
The Board is also recommending a bonus issue of one share for every 11 shares held on January 16, 2015 by a capitalisation of reserves amounting to €30 million.
This will increase the permanent capital from €330 million to €360 million.