Despite the "disappointing" results achieved by Bank of Valletta this year, shareholders were told yesterday these were "respectable" when seen within the context of the global financial crisis.
Addressing the annual general meeting, bank chairman Roderick Chalmers explained that the global financial turmoil affected earnings by nearly €54 million and pre-tax profits dropped by 60 per cent to €40.6 million, down from the previous year's €101.8 million.
Judging by the questions put by shareholders, it seems they were happy the bank still made a profit.
Mr Chalmers told them that the bank's financial results would have been worse had it not taken corrective measures over the past four years by being conservative.
"BOV went into 2008 knowing it will be facing a challenging year. The adoption of the euro was expected to have an adverse short term impact on the profits as well as bringing keener competition to the local banking market. However, what has happened over the past year - and especially since mid-September 2008 - has been truly extraordinary," he said.
Mr Chalmers said the outlook for the next 12 months must be a very cautious one.
Shareholders approved a final gross dividend of €0.0675 per share amounting to a total of €9 million. When taken together with the gross interim dividend of €0.1350 per share paid on May 28, this makes a total gross dividend of €0.2025 per share.
The shareholders also approved an increase in the nominal and paid up value of the ordinary shares from €0.75 to €1 per share, the increase to be funded by a capitalisation of reserves amounting to €33.33 million, and a bonus issue to shareholders of one share for every five shares held.
The two moves, Mr Chalmers explained, would further strengthen the balance sheet through the increase of the permanent paid up capital to €160 million and will also serve to enhance the affordability and liquidity of the bank's shares.
Replying to a shareholder's question on BOV's slice in the property market, Mr Chalmers said the bank is very happy with its 10 per cent share in the Midi consortium, which is responsible for the Tigné project.
Notwithstanding difficulties in the property market, he said there were no signs of any deterioration in the home loan book.
The government has appointed economist Gordon Cordina as its representative on the BOV board.