Pre-tax profits of €45.2 million have been announced by the Bank of Valletta group for the first six months of Financial Year 2011.
This compares with profits of €47.5 million for the equivalent period, which ended March 31, 2010. The board declared a gross interim dividend of €0.06,25 per share, in line with last year's interim dividend.
Describing the context within which the results were achieved, BOV chairman Roderick Chalmers stated that the sovereign debt crisis that has plagued the Eurozone since April last year has continued unabated.
Portugal followed Greece and Ireland in requesting financial assistance of the EU and the IMF.
And while Spain and Italy seemed to have weathered the storm, it remained to be seen whether Greece's debt burden was sustainable.
"Fortunately, the bank's exposure to the three more seriously challenged eurozone economies is very limited, but the wider concern is the fear of contagion into the broader euro market should the EU leadership not move in a determined and conclusive manner to secure a long term solution to the current uncertainty," stated the chairman.
He added that the longer this takes, the more likely it is that domestic political pressures in the different European states may serve to make a lasting solution more difficult to achieve.
Mr Chalmers said that the political upheaval in North Africa, Libya in particular, and the tragic aftermath of the earthquake in Japan, had a direct bearing on the local economy – Libya because of the strong business ties with Malta, and Japan because of its global influence as the world's third largest economy, and the effect on the oil price triggered by the uncertain future surrounding nuclear power generation.
He said that the bank was working closely with its Maltese clients who had businesses in Libya "to support them through this period of challenging circumstances."
Referring directly to the credit perspective, Mr Chalmers affirmed that, "we have taken a cautious view on this secondary exposure, and have added to our collective allowance in this regard, to cater for the higher downside risks. The bigger concerns at this stage are more geo-political than business in nature, particularly as an early solution to the upheaval in Libya is becoming more elusive with the passage of time."