Bank of Valletta yesterday apologised for its La Valette Property Fund debacle, with chairman Frederick Mifsud Bonnici telling shareholders the bank was committed to raising its own standards.
The apology is a first for the bank, which had hitherto avoided admissions of culpability in relation to the failed property fund, which stopped trading in 2008 after losing some €50 million in value and which has landed BOV with record fines running into hundreds of thousands of euros.
In his first annual general meeting since assuming the bank’s top seat, Mr Mifsud Bonnici said the bank was sorry if it had failed to reach the standards expected of it and promised to do better in future.
His mea culpa was further bolstered by bank CEO Charles Borg telling shareholders the bank was “cooperating fully” with the financial regulator in identifying and compensating inexperienced investors who should never have been allowed to invest in the fund in the first place.
The AGM came at the tail-end of a year which saw profits shoot up to €110.7 million, a balance sheet that hit the €7 billion mark for the first time and a slight reduction in the bank’s percentage of non-performing loans.
The BOV chairman said he was “satisfied” with performance over the past financial year. He noted with pride that, assuming no major crises, the bank expected to reach its 2018 capital buffer requirements under the Basel III accord without dipping into shareholders’ pockets.
Shareholders unanimously approved a dividend payout of 13c per share, with the bank also giving its funders a bonus of one share for every nine they held.
The bank’s nine directors enjoyed an early Christmas present when shareholders raised no objection to increasing their remuneration pool to €290,000, after a five-year period in which director payouts had remained unaltered.
Lawyer Ann Fenech was elected to the bank’s board for the first time and BOV veteran Franco Xuereb re-elected after a four-year absence. They replace Norman Rossignaud and Manuel Rizzo. CEO Mr Borg said non-performing loans now comprised 4.4 per cent of the bank’s loan portfolio – better than last year’s 5.1 per cent figure.
He said the bank had seen sustained growth in demand for home loans, especially among first-time buyers, although credit demand from businesses remained sluggish.
A five per cent increase in customer deposits meant the bank now held a record €5.9 billion in such deposits. That record contributed to another record – the €7 billion balance sheet milestone the CEO hailed as “significant for both the bank and the nation”.
Against the backdrop of an all-male board of directors, Mr Borg noted with pride that BOV had been awarded Equality Commission certification for encouraging a gender-equal workplace.
It was still too early to comment on the EU’s banking union proposals, Mr Borg said, although he emphasised the need for the bank to remain cautious in its approach to minimise risk.
Shareholders raised few objections, save for one irate man who felt cheated by directors’ bonus share proposals and argued that share prices would fall once dividends were issued today.
Most saved their energy for the AGM’s end, with ravenous shareholders cramming a reception hall and elbowing one another in the hunt for sandwiches, sausage rolls and complimentary drinks.