Bank of Valletta shareholders yesterday approved a one for one bonus issue of shares, which basically doubles the amount of shares they hold, as well as a gross dividend of Lm8.3 million, which will equate to 15c per share.
The shareholders approved all the motions proposed by the board during the annual general meeting held at the Mediterranean Conference Centre in Valletta.
The bank's chairman, Roderick Chalmers, emphasised the success registered by the bank during the financial year, which closed in September.
The BOV Group made a pre-tax profit of Lm26.6 million, a staggering 35 per cent increase over the previous year. In view of the good results, the board felt it was in a position to recommend a final gross dividend of 15c per share - making a total gross distribution of 22.5c per share for the year - up 40 per cent on the previous year.
The board is also recommending a one for one bonus issue of shares. The bonus issue, Mr Chalmers explained, will serve to both increase the permanent capital base of the bank and, hopefully, increase the affordability and liquidity of the bank's shares to the benefit of all shareholders.
He referred to the bank's share price, saying that although not related to any direct influence on the part of the bank management, it had soared when compared to the previous year by some 60 per cent as at December 6.
"As the regulator would wish me to point out, you should note that share prices can go down as well as up and past performance is not necessarily an indicator of future results," he added.
A shareholder remarked that the dividend was not fair when compared to the company's profit. Mr Chalmers explained that the dividend compared well with international standards. Moreover, he pointed out that a substantial part of the retained profit went in to reinvestment.
The same applied to the provision the company makes for bad debts, which a number of shareholders complained about. Mr Chalmers said the situation was improving and the bank was focused on reducing the need for such provision to the minimum levels possible.
He described the past financial year as one of change, challenge and opportunity for the Bank of Valletta Group.
"Over the past year we have progressed towards a position whereby the role and responsibility of the board is to set strategy and exercise responsible oversight and good stewardship, while that of management is to execute agreed strategy, manage and run the business and, of course, deliver results," he said.
The top leadership structure of the bank was reorganised to reflect the immediate and future requirements of the business. Referring to what lays ahead, Mr Chalmers mentioned the bank's privatisation, emphasising that the company will retain its business, as it had promised to do.
However, he added, the board intends being an active participant in the process and has worked closely throughout the year with the government's Privatisation Unit and their advisers (Rothschild SpA).
The meeting elected Joseph Borg, Marlene Mizzi, George Portanier, Norman Rossignaud, James Vella and George Wells as board members. Franco Masini withdrew his nomination before the voting took place and Franco Xuereb was not elected.