Bank of Valletta Group reported a profit before tax of €174.7 million for the 15 month period ended on 31 December 2017, compared to €145.9 million for the 12 months to September 2016 (or €118.4 million when adjusted for the one off gain on the VISA transaction).

Key performance indicators were satisfactory with a pre-tax Return on Equity of 16.5% and a Cost/Income ratio of 47.3%. (FY 2016, adjusted for one off gain on VISA: 16.9% and 44.3% respectively).

Overall performance was impacted by both core and non-core items. The Group’s strategy to focus on alternative revenue streams helped to alleviate the pressures on net interest income and lower exchange earnings. Continuing investment in both IT and HR, the two primary resources, led to a higher cost base while the cautious view towards provisioning was retained during the period under review.

• Gains attributed to external non-core factors, namely fair value gains and share of profits from the insurance business, amounted to €5.6 million and €19.3 million respectively.

• The core profit of €149.9 million was reported for the 15 month period to December 2017, compared to the €101.2 million for the 12 months to September 2016.

• Net interest margin of €182.9 million was, on average, 2% below last year.  

• Operating costs for the 15 month period of €151.3 million were, on average, 7% higher than last year. 

• The strategic drive by the bank in adopting a more proactive approach towards debt recovery and the management of non performing loans has resulted in a reversal of impairment allowances of €6.2 million. 

• Total assets at the end of the reporting period stood at €11.8 billion (September 2016: €10.7 billion).

• Equity attributable to the shareholders of the bank, which also reflects the increase from the rights issue, amounted to €962 million as at 31 December 2017 (September 2016: €729 million).

• The group’s CET 1 ratio stood at 16.1% at the reporting date, up from 12.8% as at 30 September 2016.

• Customer deposits at 31 December 2017 amounted to €10.1 billion, an increase of €916 million over September 2016, mostly from the retail segment. Tighter onboarding procedures were applied in line with the lower risk business model.

• Gross loans and advances to customers, at €4.5 billion, were €162 million higher than September 2016. Demand for credit arose from both the personal and the business sectors. The write off exercises continued during the period under review whereby long outstanding exposures, which were mostly provided for, were written off.

Dividend

Further to the gross interim dividend of €0.045 per share paid in May 2017, the Board of Directors will, at the forthcoming Annual General Meeting, be recommending a final gross dividend of €0.08 per share.

Shareholders will be given the right to elect to receive the dividend either in cash or by the issue of new shares. The total dividend for the year represents a gross yield of 6.9% by reference to the closing share price of €1.80 per share at end December 2017 and a net dividend cover of 3 times.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.