Interim dividend

Now that the Bank of Valletta’s financial year has just ended, perhaps it is time for the board to consider resuming the payment of an interim dividend.

Shareholders have been very hard hit on two levels: first, the price of each share has plummeted well below the net asset value; and, secondly, the failure to declare a dividend for the first time ever in the bank’s history.

Pensioners especially, have been severely affected and the government, ironically a major shareholder – quite apart from the bank’s management – must be conscious of their plight. Pressure should be brought to bear on the board to declare an interim dividend, considering that a contingency reserve has already been provided towards the pending lawsuit in Italy against the bank.

This is not the case of a loss: the bank registered a profit last time and there are occasions when, even though a loss is declared, dividends are distributed through accumulated profits. Consequently, there is hardly any reason for the board not to distribute a dividend this time around.

The bank shows a solid balance sheet, so what is wrong with Malta’s largest bank? Shareholders rightfully expect an interim distribution come next May.

My appeal is not only directed to the board of management but to the small shareholders to demonstrate their dissatisfaction with the current state of affairs. We should raise our voice in protest now, not during the annual general meeting when it will be too late in the day. Panic-selling of Bank of Valletta shares as we have lately witnessed could be counterproductive and very likely leads nowhere.

The answer may well be a massive protest in the press by the small shareholders, insisting on the resumption of the former distribution policy, all the more so when profits are indeed favourable as they have consistently been these last fiscal years.