Lombard Bank Group has registered a 14.9 per cent year-on-year decrease in pre-tax profit of €9.4 million for the year ended December 31, 2012.
The group consists of Lombard Bank Malta plc and Redbox Limited, through which company shares in MaltaPost plc are held.
The decrease in profits was attributed to non-recurring transactions – a disposal of securities – in 2011 and to the adverse movements in international postal tariffs.
Lombard said in a company announcement on the Malta Stock Exchange that this result was “very satisfactory” considering the bank continued to pursue its strategy to maintain a strong capital base and a high level of liquidity in the context of negative economic sentiment across financial markets.
Loans and advances to customers increased by three per cent to €319.9 million. Property project finance remained a principal element of the bank’s portfolio, while careful management of risk remained crucial to ensuring the long-term viability of business propositions.
The board is recommending a gross dividend of €0.12 per share, an increase of four per cent over 2011. It is also proposing a bonus share issue of one share for every 10 held. The annual general meeting is scheduled for April 25.
The bonus share issue will be allotted on May 28 to shareholders on the register on May 27. The bonus issue will be funded by a capitalisation of reserves amounting to €902,318.
“Reflecting on the past year, the group has remained on the path of stable and reliable growth, providing a good return to stakeholders and this notwithstanding difficult economic times,” chief executive Joseph Said explained.
“We remain cautiously optimistic that our resilience serves us in good stead to capitalise upon emerging opportunities in 2013 and beyond.”
Lombard added it considered the increase of €985,000 in impairment allowances to be adequate. Its loan-to-deposit ratio of 69 per cent at year-end constitutes “one of the key strengths” of the balance sheet, it said.
The bank said it remained mindful of its strategy to cultivate long-term and robust relationships with a wide network of customers. Deposits remained competitive with realistic rates of interest and stable at €462 million. The bank also continues to develop international banking business relationships that had a positive effect on fee income.