Lombard Bank Malta plc - Interim Directors’ Statement

Tuesday, May 19th, 2015

On 18 May, Lombard Bank Malta plc issued its Interim Directors’ Statement updating the market on its performance during the first four months of 2015.

During the period under review, the Bank registered a decline in profit after tax compared to the same period in 2014. The Directors explained that interest margins were maintained at the same level of the previous year as lower interest income was offset by a decrease in interest expense given the lower interest cost on customer deposits. Meanwhile, fee and commission income increased as the Bank continued to develop its transaction-based business.

On the other hand, operating expenses increased as the Bank was burdened with more compliance and regulatory requirements as well as continued investment in technology products and human resources. The announcement also explained that, in line with the traditionally cautious provisioning policy, impairment allowances were increased to provide for lending situations that by the nature of the underlying business require extended time to mature.

MaltaPost plc, the Bank’s postal subsidiary, reported an improved performance in line with expectations. View further details on the interim results of MaltaPost plc here.

Lombard also reported that loans and advances to customers were down as replacement of early repayments proved to be sluggish and difficult in a more restrictive lending environment. Meanwhile, customer deposits continued to increase leading to higher liquidity levels and balance sheet growth. The announcement also noted that the Bank’s liquidity and capital ratios remained high during the period and exceeded regulatory thresholds.

In conclusion, the Directors noted that they are confident that the Bank will provide a satisfactory half-year result within the context of the challenging environment that is currently being faced by the banking sector.

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