The Lombard Bank Group said today that it made a pre-tax profit of €7 million in the six months up to the end of June, an increase of 3.6 pr cent over the same period last year.
The pre-tax profit of Lombard Bank Malta p.l.c. increased to €6.19 million, 1.7 per cent higher than in 2010.
Net Interest Income was €7.25 million, down by 11.3 per cent from €8.17 million in 2010 as a result of decreased customer lending which, the group said, also reflecting the bank's prudent credit policies.
Operating Income remained stable at €19.94 million.
Group Cost-to-Income ratio increased from 62.0 per cent to 63.8 per cent while that of the bank increased from 33.0 per cent to 35.9 per cent. This was due to higher labour cost as well as investment in IT services such as internet banking and card products.
Impairment Allowances as a percentage of loans and advances to customers stood at 1.9 per cent (FYE 2010: 1.6 per cent). Loans and Advances to customers stood at €300.08 million down by €33.65 million consequent to subdued business sentiment in the bank's traditional market segments and
lower demand for credit in general.
Customer deposits at €453 million were lower by €19.92 million reflecting fluctuations in corporate deposits.
The group said that worldwide financial and economic concerns have returned at an even more alarming level than before. The focal point is now the debt problem of a number of European countries and the United States of America. This has led to a flight to quality also bringing about partly irrational market activities, the economic impact of which is difficult to gauge.
"The board acknowledges that the unrest on the international financial markets could also stand to have an impact on the business climate of Malta and consequently also on the bank's performance. However it believes that with the bank's strong financial fundamentals, with Capital Adequacy Ratio at a healthy 18.77 per cent (FYE 2010: 17.88 per cent) and a Loan to Deposit Ratio at 66.3 per cent (FYE 2010: 70.6 per cent), the bank is well placed to weather the turmoil."