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Lombard Bank Malta plc – Full-Year Results

Jonathan Falzon

April 17, 2025

17 April, 2025
7 min read
17 April, 2025
7 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 16 April 2025, Lombard Bank Malta plc published its Annual Report and Financial Statements for the year ended 31 December 2024. This was the first full financial year following the Rights Issue that was completed in November 2023 which translated in an increase in capital of around €46 million.

Net interest income rose by 5.4% to a record of €27.3 million (2023: €25.9 million) as the growth in gross interest income (+€4.4 million to €38.1 million) outweighed the increase in interest expense (+€3.0 million to €10.9 million). Lombard explained that the improvement in interest income reflected the growth in customer lending as well as higher income from treasury activities reflecting higher market interest rates. Meanwhile, interest expenses surged due to higher rates being paid on longer-term fixed rate deposits.

Lombard also reported a 5.6% increase in non-interest income to €47.0 million (2023: €44.5 million) driven by the increase in net fee and commission income (+€1.2 million to €6.4 million) as well as postal services (+€0.5 million to €39.2 million).

As a result, operating income climbed by 5.5% to €74.3 million compared to €70.4 million in the previous year.

On the expenditure side, total operating costs remained practically unchanged at €54.6 million as the increase in employee compensation was offset by the decline in other operating costs amid enhanced operational efficiencies.

The financial performance was boosted by a release in expected credit losses of €0.93 million in contrast to the net impairment of €1.26 million in the previous year. The release mainly resulted from lower charges taken on customer loans and advances classified in Stages 1 and 2 and was spread across the Bank’s lending portfolio.

Overall, the Group profit before tax rose by 33.6% to €19.4 million compared to €14.5 million in 2023. After accounting for a tax expense of €7.3 million and the profit attributable to minority interests of €0.87 million, the net profit attributable to shareholders of Lombard amounted to €11.3 million which translates into a return on average equity of 5.65%.

The Statement of Financial Position as at 31 December 2024 shows that total assets grew by 9.7% to €1.39 billion driven by the 15.1% (or €114 million) increase in customer loans to €872.7 million. Total liabilities rose by 9.7% to €1.17 billion, reflecting the 9.9% (or €101 million) increase in customer deposits to €1.12 billion. Given the larger increase in customer loans compared to the growth in customer deposits, the loans-to-deposits ratio climbed to 77.9% compared to 74.4% as at the end of 2023. Meanwhile, shareholders’ funds increased by 10% (or €19 million) to €209.4 million, which translates into a net asset value per share of €1.355 compared to €1.232 as at the end of 2023. The Bank’s Total Capital Ratio eased to 20.0% (31 December 2023: 21.0%), which still exceeds the minimum regulatory requirements.

Dividend

The Directors of Lombard are recommending a final net dividend per share of €0.0221 to all shareholders as at close of trading on 22 May 2025, subject to regulatory approval as well as shareholders’ approval during the upcoming Annual General Meeting scheduled to be held on 25 June 2025. The net dividend is double than that of the previous year, and translates into a payout ratio of 30.2% (2023: 18.1%). The dividend will be paid on 10 July 2025.

Outlook

The Chairman of Lombard explained that the Bank will continue to execute on its Business Plan 2023-2025 which will consist of projects involving investments in advanced technologies and operational systems, including an instant payments system, the replacement of the core banking system, further updates of the know-your-client platform transaction monitoring system, and the cybersecurity infrastructure. Lombard also intends to create new investment opportunities by the launch of bond and equity funds. Furthermore, the bank aims to update reporting systems and align its policies with emerging regulations and will continue to explore new avenues for growth, levering data analytics and digital transformation.

Meanwhile, Lombard noted that its subsidiary MaltaPost is well positioned to exploit new opportunities for innovation and growth while meeting its sustainability objectives and offering efficient postal services, and increasingly also financial and insurance products.

The Board of Directors also noted that it stepped up its efforts with regards to the long-outstanding matter of the disposal by the National Development & Social Fund of its shares in Lombard. The Directors stated that this matter is in the best interest of all stakeholders of the Group, particularly in the context of the structural changes that are likely to materialise in the Maltese banking industry in the near term.

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 16 April 2025, Lombard Bank Malta plc published its Annual Report and Financial Statements for the year ended 31 December 2024. This was the first full financial year following the Rights Issue that was completed in November 2023 which translated in an increase in capital of around €46 million.

Net interest income rose by 5.4% to a record of €27.3 million (2023: €25.9 million) as the growth in gross interest income (+€4.4 million to €38.1 million) outweighed the increase in interest expense (+€3.0 million to €10.9 million). Lombard explained that the improvement in interest income reflected the growth in customer lending as well as higher income from treasury activities reflecting higher market interest rates. Meanwhile, interest expenses surged due to higher rates being paid on longer-term fixed rate deposits.

Lombard also reported a 5.6% increase in non-interest income to €47.0 million (2023: €44.5 million) driven by the increase in net fee and commission income (+€1.2 million to €6.4 million) as well as postal services (+€0.5 million to €39.2 million).

As a result, operating income climbed by 5.5% to €74.3 million compared to €70.4 million in the previous year.

On the expenditure side, total operating costs remained practically unchanged at €54.6 million as the increase in employee compensation was offset by the decline in other operating costs amid enhanced operational efficiencies.

The financial performance was boosted by a release in expected credit losses of €0.93 million in contrast to the net impairment of €1.26 million in the previous year. The release mainly resulted from lower charges taken on customer loans and advances classified in Stages 1 and 2 and was spread across the Bank’s lending portfolio.

Overall, the Group profit before tax rose by 33.6% to €19.4 million compared to €14.5 million in 2023. After accounting for a tax expense of €7.3 million and the profit attributable to minority interests of €0.87 million, the net profit attributable to shareholders of Lombard amounted to €11.3 million which translates into a return on average equity of 5.65%.

The Statement of Financial Position as at 31 December 2024 shows that total assets grew by 9.7% to €1.39 billion driven by the 15.1% (or €114 million) increase in customer loans to €872.7 million. Total liabilities rose by 9.7% to €1.17 billion, reflecting the 9.9% (or €101 million) increase in customer deposits to €1.12 billion. Given the larger increase in customer loans compared to the growth in customer deposits, the loans-to-deposits ratio climbed to 77.9% compared to 74.4% as at the end of 2023. Meanwhile, shareholders’ funds increased by 10% (or €19 million) to €209.4 million, which translates into a net asset value per share of €1.355 compared to €1.232 as at the end of 2023. The Bank’s Total Capital Ratio eased to 20.0% (31 December 2023: 21.0%), which still exceeds the minimum regulatory requirements.

Dividend

The Directors of Lombard are recommending a final net dividend per share of €0.0221 to all shareholders as at close of trading on 22 May 2025, subject to regulatory approval as well as shareholders’ approval during the upcoming Annual General Meeting scheduled to be held on 25 June 2025. The net dividend is double than that of the previous year, and translates into a payout ratio of 30.2% (2023: 18.1%). The dividend will be paid on 10 July 2025.

Outlook

The Chairman of Lombard explained that the Bank will continue to execute on its Business Plan 2023-2025 which will consist of projects involving investments in advanced technologies and operational systems, including an instant payments system, the replacement of the core banking system, further updates of the know-your-client platform transaction monitoring system, and the cybersecurity infrastructure. Lombard also intends to create new investment opportunities by the launch of bond and equity funds. Furthermore, the bank aims to update reporting systems and align its policies with emerging regulations and will continue to explore new avenues for growth, levering data analytics and digital transformation.

Meanwhile, Lombard noted that its subsidiary MaltaPost is well positioned to exploit new opportunities for innovation and growth while meeting its sustainability objectives and offering efficient postal services, and increasingly also financial and insurance products.

The Board of Directors also noted that it stepped up its efforts with regards to the long-outstanding matter of the disposal by the National Development & Social Fund of its shares in Lombard. The Directors stated that this matter is in the best interest of all stakeholders of the Group, particularly in the context of the structural changes that are likely to materialise in the Maltese banking industry in the near term.