Bank of Valletta said today that it made a pre-tax profit of €115.8 million in the financial year which ended on September 30, up 5% over the previous year.

It said continued growth of its balance sheet, an increase in fee and commission income and positive market movements in its Financial Markets investment book were the main drivers underlying this positive result.

"The Core Operating Profit of €86.5 million, which excludes price movements on our investment portfolio and returns from our associated companies, shows a decrease of 14% from September 2012 (€100.3million). The prolonged low interest rate scenario has had a negative impact on our interest margins, particularly on the returns of our Financial Markets investment book, " the bank said

"There was a steady improvement in our Cost/Income Ratio of 38.7%, down from 40.7% in FY 2012. The Re turn on Equity registered this year is 21.1% (FY 2012: 22.3%), which compares favourably with international banks."

The Board of Directors is to recommend the payment of a final gross dividend of €0.13 per share making for a final net dividend of €0.0845 per share for a total gross dividend for the year of €0.19 per share (total net dividend per share €0.1235).

It will also recommend a bonus share issue of one share for every ten shares held which will be allotted toshareholders on the Bank’s share register as at close of business on Friday, January 17, 2014.

The bonus issue will be funded by a capitalisation of reserves amounting to €30 million.