Bank of Valletta plc - Half-Year Results

Thursday, April 25th, 2013

On 25 April, Bank of Valletta plc published its half-year results covering the six months ended 31 March 2013.

Performance Overview

During the period under review, the BOV Group generated €66.2 million in net interest income representing a 14.4% drop from the previous comparable figure reflecting the higher interest expense in view of a larger deposit base, the prevailing low returns generated by investments as well as the €5.2 million recovery registered in the previous comparable period which was not repeated in H1 2012/13.

On the other hand, the BOV Group reported a 17.2% increase in net fee and commission income to €24.4 million on the back of increased demand for investment related product and services as well as continued growth in the cards business. The Bank also accounted for €13.2 million in positive fair value movements comprising a €9.6 million fair value uplift on its bond portfolio in line with the rising trend of international bond markets as well as a €3.6 million gain on other investments and hedging securities. Meanwhile, trading profits from foreign exchange activities dropped by 1% to €8.5 million in view of the increasing competition which is resulting in lower margins. Overall, non-interest income grew by 53.6% to €46.4 million.

Administrative expenses declined by 1.1% to €41.8 million reflecting the Group’s drive to continuously improve its operational efficiency. Depreciation and amortisation grew by 5.5% to €2.9 million reflecting the Group’s investment in its IT infrastructure as well as in its branch network. Nonetheless, total non-interest expenses dropped by 0.7% to €44.7 million.

As a result, operating profit before impairment allowances amounted to €67.8 million representing an 8.6% increase over the figure registered in the six months ended 31 March 2012. Impairment allowances on the Bank’s loan book were reduced by 20.7% to €11.9 million mainly reflecting provisions on certain large specific exposures. The Group also benefitted from €8.6 million share of profits from its insurance associate companies compared to the €1.6 million registered in the previous comparable period.

Overall, the BOV Group registered a 31.5% increase in pre-tax profits to €64.6 million. After accounting for taxation of €19.8 million and minority interest of €0.2 million, the Group’s net profit amounted to €44.5 million representing a 39.3% increase over the previous comparable period.

The balance sheet shows total assets up by 7.5% to €7.2 billion largely reflecting growth in investments to €1.5 billion. Total liabilities grew by 2.3% to €6.8 billion mainly due to the €328 million increase in the Group’s deposit base since September 2012. Shareholders’ funds also increased to €544 million translating into a net asset value per share of €1.815.

Dividend

The Directors declared the payment of a gross interim dividend of €0.06 per share (net: €0.039) to all shareholders as at the close of trading on 6 May 2013. This dividend will be paid on 24 May 2013.

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Bank of Valletta plc – Half-Year Results Report as at 31 March 2013

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