Lombard Bank Malta plc - Interim Directors’ Statement

Thursday, November 19th, 2015

On 19 November, Lombard Bank Malta plc issued its Interim Directors’ Statement covering the period since 30 June 2015.

The Directors explained that the Bank continued to experience pressure on its after-tax profits during the first three quarters of 2015 as, despite maintaining a healthy core business, impairment allowances increased due to lending situations that by the nature of the underlying business require extended time to mature. Customer deposits came at a lower cost, even though volumes increased, while the lending portfolio remained lower than it was at the start of the year following loan repayments. Overall, the Bank’s net interest income decreased. On the other hand, fee and commission income maintained an upward trend as the Bank continued to grow its transaction-based business.

On the costs side, compliance and regulatory expenses remained a significant component of the increase in other operating costs due to the volume and complexity of additional regulatory requirements. Moreover, higher investment in potential new lines of business and human resources also contributed to the increase.

The Bank remains on track to meet its full year performance objectives, supported by a prudent risk profile and a solid financial position. In fact, the Directors confirmed that Lombard Bank’s liquidity and capital ratios remained well in excess of regulatory thresholds during the period.

Meanwhile, the Bank’s subsidiary, MaltaPost plc, reported an improved performance in line with expectations.

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