Lombard Bank Malta plc - Interim Results

Thursday, August 22nd, 2013

On 22 August, Lombard Bank Malta plc published its half-year results covering the six months ended 30 June 2013.

Performance Overview

During the period under review, Lombard Bank registered a 13.4% increase in net interest income to €7.7 million reflecting the 1.5% increase in gross interest income to just over €12 million as well as the 14.4% drop in interest expense to €4.4 million. These movements reflect the trends in the Bank’s loans and advances to customers as well as in customer deposits as described below.

The Group also registered a 1.4% increase in non-interest income to €12.2 million mainly reflecting the 2.6% rise in income from the Group’s postal subsidiary – MaltaPost plc. Furthermore, Lombard also revealed a 1.9% increase in net fee and commission income to €1.2 million.

Overall, the Lombard Group registered a 5.7% increase in total operating income to €19.9 million.

Administrative expenses edged 0.6% higher to €13.3 million whilst depreciation and amortisation dropped by 6.2% to €0.7 million. As a result, the Group’s operating profit before impairment allowances amounted to €5.9 million compared to €4.8 million in the first six months of 2012.

Nonetheless, this improvement was outweighed by the increase in impairment allowances to €1.6 million compared to €0.5 million during the first six months of 2012 reflecting the continued weakness in the local property market which is impacting the Bank’s corporate lending portfolio.

As a result, the Group’s pre-tax profit amounted to €4.2 million representing a 3.3% drop from the previous comparable figure. After accounting for a tax charge of €1.5 million and minority interest of €0.2 million (representing the 32.3% shareholding in MaltaPost owned by third parties), the Group’s net profit amounts to €2.5 million representing a 6.2% drop from the comparative figure in the first six months of 2012.

The Balance Sheet shows total assets of €555.5 million representing a 3.4% decrease from the comparable figures as at 31 December 2012. The reduction in assets was mainly due to the €41 million drop in balances with the Central Bank of Malta , treasury bills and cash to €92.2 million. Similarly, total liabilities dropped to €473.3 million since 31 December 2012 following a €12.5 million reduction in customer deposits reflecting the intense competition in the local market in this respect. Equity attributable to shareholders was relatively unchanged at €77.2 million giving a net asset value per share of €1.944 (Dec 2012: €1.953).

Outlook

Lombard’s Directors commented that with economic growth expected to improve in second half of 2013 and interest rates expected to remain unchanged in the foreseeable future, they are cautiously confident that the Group is well placed to meet its objectives for the full year.

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Lombard Bank Malta plc – Interim Financial Statements for the six months ended 30 June 2013.

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