Lombard Bank Malta plc - Interim Results

Thursday, August 23rd, 2012

On 23 August Lombard Bank Malta published its interim results covering the six month period to 30 June 2012. The profit after tax for the period under review dropped by 36.5% to €2.6 million mainly due to a drop in net interest income, the adverse tariff movements in the postal industry as well as the effect of one-off transactions in 2011 which were not repeated during 2012.

Net interest income generated during the first six months of the year dropped by 6.5% to €6.78 million. Interest received on debt and other fixed income instruments was the main reason for the drop in net income as this declined to €0.28 million from €1.01 million in H1 2011 reflecting the Bank’s commitment to pursue its policy of prudent treasury management, effectively meaning the placing of its funds almost exclusively with the European Central Bank at very low rates of interest.

Net fee and commission income grew by 8.8% to €1.15 million with a 3% increase in postal sales and services revenues to €10.5 million. However, total operating income dropped by 5.6% to €18.82 million as the one-off gain from the disposal of non-trading financial instruments in the first half of 2011 of €1.2 million was not repeated during 2012. Excluding the effect of the disposal of non-trading instruments, the Group operating income generated during the first six months of 2012 was in line with the comparable period last year.

Administrative expenses and other operating costs increased by 9.1% to €13.2 million with net impairment losses of €0.46 million compared to €0.19 million in the first half of 2011. The higher costs and increased impairments led to a 38.5% decline in pre-tax profits to €4.3 million.

The balance sheet as at 30 June 2012 shows deposits of €477.4 million (+3.3% from the start of the year) and advances up 4.5% to €324.2 million. The advances to deposits ratio for the period under review is of 68.0% compared to 67.1% as at December 2011. Total shareholders’ funds dropped marginally lower to €79.1 million (December 2011: €79.7 million) giving a net asset value per share (excluding minority interests) of €2.06. Lombard reported a liquidity ratio of 89% and a capital adequacy ratio of18%.

In the Half-Year Report, the Directors reported that the balance sheet remained strong and this gave the board confidence that the bank can meet future challenges with confidence. Furthermore the Board of Directors reiterated their policy of prudent risk management and cautious investment decisions. The Directors once again stated that the Bank continued to operate independently of any of its shareholders and held no financial exposure whatsoever to its largest shareholder, Cyprus Popular Bank. Moreover, the Bank further added that it holds no exposure to any form of non-Maltese sovereign or corporate securities and the Bank continued to operate as an independent Maltese banking institution.


Download a copy of the Lombard Bank Malta plc 2012 Half-Year Report


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