Bank of Valletta plc – Interim Results
Following last week's article detailing the performance of the S&P 500 index in 2025, it is worth devoting time to review the developments across the European equity markers in my last article of the year.
Financial Performance
On 29 July 2026, Bank of Valletta plc published its interim financial statements covering the six-month period ended 30 June 2026.
Net interest income increased by 9.7% (or €18.3 million) to €207 million, supported by the continued growth in customer lending and the benefits of balance sheet repositioning initiatives. In this respect, gross interest income rose by 11.1% to €241 million, comprising double digit growth from both loans and fixed income investments. Meanwhile, interest expense increased by 20.4% to €34.0 million (H1 2025: €28.2 million) reflecting the additional bond issues since last year.
In contrast, non-interest income contracted by 20% to €44.3 million (H1 2025: €55.3 million), largely reflecting the absence of the €6.4 million one-off gain from the derecognition of a liability recognised in the comparative period, and lower trading profits of €2.7 million (H1 2025: €8.5 million). Within non-interest income, net fee and commission income eased by 2.0% to €39.1 million (H1 2025: €39.9 million), but BOV explained that the modest decrease was principally attributable to the revised accounting treatment of advances processing fees, which are now recognised over the expected life of the related loans within net interest income in accordance with IFRS 9.
Total operating income amounted to €251 million, which is 3.0% (or €7.3 million) higher than the €244 million generated in the same period last year. Net interest income represented approximately 82% of operating income and remained the principal contributor to the Group’s earnings.
Operating expenses increased by 10.6% to €129 million (H1 2025: €117 million), reflecting continued investment in people, technology, regulatory delivery and transformation. Consequently, the cost-to-income ratio increased to 51.4% from 47.9% in the same period last year, which BOV noted was broadly in line with expectations set at the start of the year.
BOV’s financial performance was dampened by a net impairment charge of €5.7 million, in contrast to the net release of €3.3 million recorded in the same period last year. The charge was mainly attributable to provisioning on a limited number of purchased or originated credit-impaired facilities and higher write-offs principally relating to legacy non-performing exposures, and did not reflect any material deterioration in the broader lending portfolio. BOV highlighted that the non-performing exposure ratio improved further to 1.49% compared to 1.68% as at the end of 2025.
Elsewhere, BOV recorded a gain of €3.4 million from its share of results of associates, compared to €4.7 million in H1 2025, reflecting lower contributions from the Group’s insurance associates driven by higher claims experience, increased operating expenses and movements in technical provisions, partly offset by premium growth.
Overall, BOV reported a profit before tax of €120 million, which is 11.3% lower than the €135 million reported last year. After accounting for a tax charge of €40.9 million, BOV’s net profit for the period amounted to €79.0 million (H1 2025: €89.5 million), which translates into an annualised return on average equity of 10.5% compared to 12.5% in the same period last year.
The Statement of Financial Position as at 30 June 2026, when compared to 31 December 2025, shows that total assets rose by 6.6% (or €1.1 billion) to €17.6 billion. BOV registered a 6.9% (or €0.5 billion) growth in net customer loans to €8.5 billion and a €63.8 million increase in its treasury portfolio to €6.8 billion, whilst cash and short-term funds rose to €1.4 billion (31 December 2025: €0.9 billion). Total liabilities increased by 7.1% (or €1.1 billion) to €16.1 billion, driven by growth of 5.4% (or €0.7 billion) in customer deposits to €14.5 billion as well as the recognition of the €300 million Senior Preferred Notes issued during the period. As a result, the gross loans-to-deposits ratio rose to 59.7% from 59.0%. BOV’s equity base expanded by 1.8% (or €26.7 million) to €1.52 billion, which translates into a net asset value per share of €2.376 (31 December 2025: €2.333). BOV’s CET1 ratio, which excludes first-half profits, decreased to 19.3% (31 December 2025: 20.9%) whilst its total capital ratio stood at 27.1% (31 December 2025: 29.3%).
Dividend
The Board of Directors declared a net interim dividend of €33.6 million or €0.0523 per share (H1 2025: €0.0556). The net dividend, which is 5.9% lower than that distributed in respect of the comparable period, represents a payout ratio of 42.5%. The interim dividend is payable to all shareholders as at close of trading on Tuesday 4 August 2026 and will be paid on Friday 21 August 2026.
Outlook
Management remains cautiously optimistic regarding the Group’s prospects for the remainder of the financial year. Based on performance in the first half of 2026, BOV expects to remain within the previously communicated profit before tax guidance range of €215 million to €250 million for FY2026 and continues to anticipate a pre-tax return on average equity comfortably above 15%.
The article contains public information only and is published solely for informational purposes. It should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this article. Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is under no obligation to update or keep current the information contained herein. Since the buying and selling of securities by any person is dependent on that person’s financial situation and an assessment of the suitability and appropriateness of the proposed transaction, no person should act upon any recommendation in this article without first obtaining investment advice. Rizzo Farrugia, its directors, the author of this article, other employees or clients may have or have had interests in the securities referred to herein and may at any time make purchases and/or sales in them as principal or agent. Furthermore, Rizzo Farrugia may have or have had a relationship with or may provide or has provided other services of a corporate nature to companies herein mentioned. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security mentioned in this article. Neither Rizzo Farrugia, nor any of its directors or employees accepts any liability for any loss or damage arising out of the use of all or any part of this article. Additional information can be made available upon request from Rizzo, Farrugia & Co. (Stockbrokers) Ltd., Airways House, Fourth Floor, High Street, Sliema SLM 1551. Telephone: +356 2258 3000; Email: info@rizzofarrugia.com; Website: www.rizzofarrugia.com © 2021 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved. This article may not be reproduced or redistributed, in whole or in part, without the written permission of Rizzo Farrugia. Moreover, Rizzo Farrugia accepts no liability whatsoever for the actions of third parties in this respect.
This article was produced by Edward Rizzo, Director at Rizzo Farrugia, which is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange. The company’s registered address is at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta.
The article contains public information only and is published solely for informational purposes. It should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this article. Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is under no obligation to update or keep current the information contained herein. Since the buying and selling of securities by any person is dependent on that person’s financial situation and an assessment of the suitability and appropriateness of the proposed transaction, no person should act upon any recommendation in this article without first obtaining investment advice. Rizzo Farrugia, its directors, the author of this article, other employees or clients may have or have had interests in the securities referred to herein and may at any time make purchases and/or sales in them as principal or agent. Furthermore, Rizzo Farrugia may have or have had a relationship with or may provide or has provided other services of a corporate nature to companies herein mentioned. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security mentioned in this article. Neither Rizzo Farrugia, nor any of its directors or employees accepts any liability for any loss or damage arising out of the use of all or any part of this article. Additional information can be made available upon request from Rizzo, Farrugia & Co. (Stockbrokers) Ltd., Airways House, Fourth Floor, High Street, Sliema SLM 1551. Telephone: +356 2258 3000; Email: info@rizzofarrugia.com; Website: www.rizzofarrugia.com © 2021 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved. This article may not be reproduced or redistributed, in whole or in part, without the written permission of Rizzo Farrugia. Moreover, Rizzo Farrugia accepts no liability whatsoever for the actions of third parties in this respect.
This article was produced by Edward Rizzo, Director at Rizzo Farrugia, which is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange. The company’s registered address is at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta.