Bank of Valletta chief Deo Scerri would not comment on the reasons why the bank was challenging a recent ruling in which they were ordered to compensate Property Fund investors €3.4 million.

“It is not in the shareholders’ interest to explain the legal grounds on which the challenge is being made at this stage,” he told Times of Malta.

Mr Scerri was asked on the latest developments of the La Valette Multi-Manager Property Fund saga yesterday, during a news conference marking the announcement of the financial results for the year ending December 31, 2017.

It transpired that the bank’s profit before tax soared to €174.7 million, up from €145.9 million in the previous year, which included a one off €27 million gain on Visa.  

However, it was pointed out that the latest financial year comprised a 15-month period between October 2016 and last December.

The board of directors is recommending a gross final dividend of 8c per share.

Last month, 400 BOV investors were awarded €3.4 million plus interest by the financial arbiter, in a case which goes back to 2012.

Launched in 2005 the Property Fund had performed badly to the point that it was suspended in 2008 and wound up in 2012.

From a regulatory aspect, the investors had complained that they had been sold a product for experienced investors without their knowledge.

Following the arbiter’s decision, BOV announced its intent to challenge the decision before the Court of Appeal.

Asked about the impact the financial compensation would have on the bank’s finances, the BOV chairman noted that the case was still pending and consequently no money had been disbursed.

However, he insisted that the decision to file the appeal was not done frivolously but on the advice of “established” legal experts.

Mr Scerri declined to comment on the legal grounds on which the bank was seeking redress. He said that it was neither in our interest as a newspaper nor those of the bank’s shareholders, that such information be divulged at this stage of proceedings. 

During the news conference, BOV announced that shareholders would have the option of redeeming the dividends either in cash or in new ordinary shares.

Customer deposits at December 31, 2017 amounted to €10.1 billion, an increase of €916 million over September 2016, mostly from the retail segment.