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Bank of Valletta plc – Full-Year Results

cyber

March 27, 2026

27 March, 2026
8 min read
27 March, 2026
8 min read

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 26 March 2026, Bank of Valletta plc published its Annual Report and Financial Statements for the financial year ended 31 December 2025.

Net interest income increased by 0.4% (or €1.5 million) to €387 million as gross interest income increased by 2.1% (or €9 million) to €446 million whilst interest expenses increased by 14.8% (or €7.6 million) to €59 million. In this respect, BOV explained that the performance reflects the continued growth in its lending and investments portfolios as part of the Group’s strategy to optimise its balance sheet by deploying funds in long-term interest-bearing assets. Meanwhile, the interest expenses increased following the issuance of Tier 2 subordinated bonds to support the bank’s capital requirements.

BOV also recorded an increase of 9.6% (or €9.6 million) in non-interest income to €109 million principally reflecting the improvement in net fee and commission income, which grew 8.2% to €88 million, driven by strong momentum in cards, credit-related activities, and investment services.

In aggregate, BOV’s total operating income increased by 2.3% (or €11 million) to €497 million compared to €486 million in 2024.

BOV’s financial performance was impacted by a marginal net impairment charge of €0.04 million, compared to the net reversal of €23.8 million recorded in the previous year. BOV explained that the result reflects offsetting portfolio movements and the continued strengthening of its credit-risk framework. BOV noted that non-performing exposures as at the end of 2025 stood at 1.68% compared to 2.68% in the previous year.

On the expenditure side, total operating costs increased by 13.9% to €247 million reflecting higher levels of employee compensation and technology-related expenses. Consequently, the cost-to-income ratio increased to 49.7% compared to 44.6% in 2024.

BOV’s share of results from associate investments (namely Mapfre MSV Life plc and Mapfre Middlesea plc) amounted to €10.4 million compared to €9.5 million in 2024.

Overall, BOV reported a profit before tax of €260.4 million, which is 13.9% lower than the €302.4 million figure registered in 2024. After accounting for a tax charge of €88.7 million, the net profit amounted to €171.7 million which translates into a return on average equity of 11.8% (2024: 14.9%).

The Statement of Financial Position as at 31 December 2025 shows that total assets increased by 9.5% (or €1.4 billion) to €16.5 billion with considerable increases in customer loans (+€1.1 billion to €8.0 billion) and investments (+€530 million to €6.9 billion). The increases were partially offset by a reduction in balances with the Central Bank of Malta, treasury bills and cash (-€165 million) to €921 million.

Total liabilities increased by 9.8% (or €1.3 billion) to €15.0 billion reflecting the increase in customer deposits (+€937 million to €13.7 billion) and the issuance of €275 million in subordinated debt during the year. Overall, the loan-to-deposit ratio climbed to 59% compared to 54.5% in 2024.

Total equity expanded by 6.3% (or €89 million) to €1.50 billion which translates into a net asset value of €2.33 per share (31 December 2024: €2.19 per share, adjusted for the 2025 bonus issue). The Bank’s capital ratios remained above regulatory requirements with the CET1 ratio at 20.9% (2024: 22.6%) and the Total Capital Ratio at 29.3% (2024: 27.4%).

Dividend

The Board of Directors is recommending a final net dividend of €0.0659 per share to be paid on Friday 12 June 2026 to all shareholders as at close of trading on Thursday 7 May 2026, subject to approval by the Annual General Meeting scheduled for Wednesday 10 June 2026.

In addition, the Board approved a special net dividend of €0.0105 per share, reflecting the portion of 2025 profitability that exceeded the upper bound of the Bank’s previous profit before tax guidance of €250 million. Coupled with the net interim dividend of €0.0556 per share paid in the first half of 2025, the total net dividend attributable for the 2025 financial year amounts to €0.1320 per share.In absolute terms, the total net dividend declared for FY2025 amounts to €85 million, unchanged from last year and representing a payout ratio of 49.4% (2024: 42.6%).

Issuance of €300 million in Senior Preferred Notes

The Board of Directors has approved the initiation of the process for the issuance of a €300 million Senior Preferred note in international capital markets, subject to regulatory approval. Further details on the structure, timing, and terms are expected to be published in the coming weeks.

Financial Outlook

The Group expects to continue growing its balance sheet with loan growth targeted at around 10%, supported by both retail and commercial portfolios. The Bank noted that net interest income remains sensitive to the interest-rate environment and is expected to remain in a moderately higher range compared with 2025. Nonetheless, operating expenditure is anticipated to grow as the Group aims to continue to invest in digitalisation, IT resilience, and regulatory compliance programmes continues. The cost-to-income ratio is projected to be in the low-to-mid 50% range during 2026, before improving as efficiency gains are progressively realised over the medium term.

BOV expects that in 2026 its profit before tax will range between €210 million and €250 million reflecting sustained commercial performance alongside the strategic investment cycle. Therefore, the Gank expects to maintain a double-digit return on average equity. Furthermore, that the Group will maintain a dividend payout ratio up to 50%.

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.

On 26 March 2026, Bank of Valletta plc published its Annual Report and Financial Statements for the financial year ended 31 December 2025.

Net interest income increased by 0.4% (or €1.5 million) to €387 million as gross interest income increased by 2.1% (or €9 million) to €446 million whilst interest expenses increased by 14.8% (or €7.6 million) to €59 million. In this respect, BOV explained that the performance reflects the continued growth in its lending and investments portfolios as part of the Group’s strategy to optimise its balance sheet by deploying funds in long-term interest-bearing assets. Meanwhile, the interest expenses increased following the issuance of Tier 2 subordinated bonds to support the bank’s capital requirements.

BOV also recorded an increase of 9.6% (or €9.6 million) in non-interest income to €109 million principally reflecting the improvement in net fee and commission income, which grew 8.2% to €88 million, driven by strong momentum in cards, credit-related activities, and investment services.

In aggregate, BOV’s total operating income increased by 2.3% (or €11 million) to €497 million compared to €486 million in 2024.

BOV’s financial performance was impacted by a marginal net impairment charge of €0.04 million, compared to the net reversal of €23.8 million recorded in the previous year. BOV explained that the result reflects offsetting portfolio movements and the continued strengthening of its credit-risk framework. BOV noted that non-performing exposures as at the end of 2025 stood at 1.68% compared to 2.68% in the previous year.

On the expenditure side, total operating costs increased by 13.9% to €247 million reflecting higher levels of employee compensation and technology-related expenses. Consequently, the cost-to-income ratio increased to 49.7% compared to 44.6% in 2024.

BOV’s share of results from associate investments (namely Mapfre MSV Life plc and Mapfre Middlesea plc) amounted to €10.4 million compared to €9.5 million in 2024.

Overall, BOV reported a profit before tax of €260.4 million, which is 13.9% lower than the €302.4 million figure registered in 2024. After accounting for a tax charge of €88.7 million, the net profit amounted to €171.7 million which translates into a return on average equity of 11.8% (2024: 14.9%).

The Statement of Financial Position as at 31 December 2025 shows that total assets increased by 9.5% (or €1.4 billion) to €16.5 billion with considerable increases in customer loans (+€1.1 billion to €8.0 billion) and investments (+€530 million to €6.9 billion). The increases were partially offset by a reduction in balances with the Central Bank of Malta, treasury bills and cash (-€165 million) to €921 million.

Total liabilities increased by 9.8% (or €1.3 billion) to €15.0 billion reflecting the increase in customer deposits (+€937 million to €13.7 billion) and the issuance of €275 million in subordinated debt during the year. Overall, the loan-to-deposit ratio climbed to 59% compared to 54.5% in 2024.

Total equity expanded by 6.3% (or €89 million) to €1.50 billion which translates into a net asset value of €2.33 per share (31 December 2024: €2.19 per share, adjusted for the 2025 bonus issue). The Bank’s capital ratios remained above regulatory requirements with the CET1 ratio at 20.9% (2024: 22.6%) and the Total Capital Ratio at 29.3% (2024: 27.4%).

Dividend

The Board of Directors is recommending a final net dividend of €0.0659 per share to be paid on Friday 12 June 2026 to all shareholders as at close of trading on Thursday 7 May 2026, subject to approval by the Annual General Meeting scheduled for Wednesday 10 June 2026.

In addition, the Board approved a special net dividend of €0.0105 per share, reflecting the portion of 2025 profitability that exceeded the upper bound of the Bank’s previous profit before tax guidance of €250 million. Coupled with the net interim dividend of €0.0556 per share paid in the first half of 2025, the total net dividend attributable for the 2025 financial year amounts to €0.1320 per share.In absolute terms, the total net dividend declared for FY2025 amounts to €85 million, unchanged from last year and representing a payout ratio of 49.4% (2024: 42.6%).

Issuance of €300 million in Senior Preferred Notes

The Board of Directors has approved the initiation of the process for the issuance of a €300 million Senior Preferred note in international capital markets, subject to regulatory approval. Further details on the structure, timing, and terms are expected to be published in the coming weeks.

Financial Outlook

The Group expects to continue growing its balance sheet with loan growth targeted at around 10%, supported by both retail and commercial portfolios. The Bank noted that net interest income remains sensitive to the interest-rate environment and is expected to remain in a moderately higher range compared with 2025. Nonetheless, operating expenditure is anticipated to grow as the Group aims to continue to invest in digitalisation, IT resilience, and regulatory compliance programmes continues. The cost-to-income ratio is projected to be in the low-to-mid 50% range during 2026, before improving as efficiency gains are progressively realised over the medium term.

BOV expects that in 2026 its profit before tax will range between €210 million and €250 million reflecting sustained commercial performance alongside the strategic investment cycle. Therefore, the Gank expects to maintain a double-digit return on average equity. Furthermore, that the Group will maintain a dividend payout ratio up to 50%.