Lombard Bank Malta plc reported very good results for the year ended December 31, 2004, which were somewhat inadvertently masked by comparing them to the 15-month-long previous financial year.
I took the liberty to re-state some key 2002/2003 figures to a 12-month basis in the table above:
As one can see, Lombard progressed on all fronts, increasing both net interest income and non-interest income, notably fees, commissions and net gains on disposable of non-trading financial instruments.
Interest receivable fell negligibly because a higher volume of loans buttressed falling average loan rates but interest payable fell by 15 per cent as the bank cut deposit rates and saw a reduction in deposits.
Loans to customers increased by Lm12 million, a giant 20 per cent, and to these one must add another Lm4 million loaned to banks. Total loans finished 2004 at Lm 110 million (2003: Lm94 million), up by 17 per cent. Deposits from customers went down from Lm 168 million at the end of 2003 to Lm165 million in December 2004.
On a comparative basis, administrative expenses went up but only a reasonable seven per cent. Furthermore, depreciation, provisions for potential losses, and net impairment losses for 2004 were much smaller, marginally offset by higher goodwill amortisation.
Profit before tax at Lm2.5 million was up 47 per cent on the re-stated comparable figure for the previous financial period.
Profit after tax was similarly 40 per cent higher, at Lm1.6 million. A dividend of 15 cents gross is being proposed to shareholders who were registered on February 28, 2005.
At around the current price of Lm4.75, Lombard's historic price-earnings ratio is 12.5, the lowest of the listed banks'.
Lombard has been growing nicely and, under normal circumstances, should perhaps command a higher capitalisation. It has so far managed to manoeuvre itself successfully in the wake of the big banks' pricing power, and do even more. The small turnover of shares, making trading rather difficult, may be keeping the price back.
Mr Azzopardi is managing director of Azzopardi Investment Management Limited (www.azzopardi.com) which is licensed by the MFSA to provide investment services, including stockbroking. The company is involved in acting as sponsoring and corporate stockbroker for various listed companies.
Mr Azzopardi or related parties, including the company, and their clients, are likely to have an interest in securities mentioned. This article is only meant to provide information, which the writer believes to be accurate at the time of writing, and is not intended to give investment advice and its contents should not be construed as such.
The value of securities, and the currencies in which they are denominated, may go down as well as up. Readers are re-quested to seek professional financial advice tailored to their own personal circumstances.
pva@onvol.net