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Bank of Valletta plc – Interim Results

Jonathan Falzon

August 1, 2025

1 August, 2025
8 min read
1 August, 2025
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 31 July 2025, Bank of Valletta plc published its interim financial statements covering the six-month period ended 30 June 2025.

Net interest income declined by 2.5% to €189 million compared to the record of €194 million reported in the same period last year. Gross interest income eased by 1.6% to €217 million reflecting the drop in the ECB benchmark rates when compared to the same period last year, which was also partly offset by higher income from the bank’s growing treasury portfolio and customer loan book. Meanwhile, the higher interest expense (+4.9% to €28 million) reflects the additional issuance of subordinated bonds towards the end of 2024.

Meanwhile, non-interest income surged by 39.4% to €55.3 million (H1 2024: €39.7 million) driven by increased net fee and commission income and gains from foreign exchange. Non-interest income also included a gain of €6.4 million from a one-off derecognition of a liability attributable to an update to the contractual terms with a third-party.

Total operating income amounted to €244 million, which is 4.6% higher than the €233 million in the same period last year.

Operating expenses increased by 23.2% to €117 million (H1 2024: €95 million) reflecting continued investment in personnel and technology reflecting the execution of several strategic objectives. Consequently, the cost-to-income ratio increased to 47.9% from 40.7% in the same period last year.

BOV’s financial performance was supported by a net impairment release of €3.3 million, which however was lower than the release of €5.2 million recorded in the same period last year. BOV highlighted that the non-performing loan ratio improved by nearly 40 basis points to 2.3%.

Moreover, BOV recorded a gain of €4.72 million from its share of results of associates, compared to €4.62 million in H1 2024.

Overall, BOV reported a profit before tax of €135 million, which is 8.8% lower than the €148 million reported last year. After accounting for a tax charge of €45.6 million, BOV’s net profit for the period amounted to €89.5 million, which translates into an annualised return on average equity of 12.5% (H1 2024: 15.0%).

The Statement of Financial Position as at 30 June 2025, when compared to 31 December 2024, shows that total assets rose by 5.4% (or €812 million) to €15.9 billion. BOV registered an 8.0% (or €551 million) growth in customer loans to €7.4 billion and 5.8% (or €368 million) growth in investments to €6.7 billion but held marginally lower levels of balances with the Central Bank, treasury bills and cash at €1.0 billion. Total liabilities increased by 5.6% (or €772 million) to €14.5 billion driven by an increase in customer deposits of 2.1% (or €263 million) to €13.1 billion and the recognition of the subordinated bonds issued towards the end of the reporting period. As a result, the loan-to-deposit ratio rose to 56.6% from 53.5%. BOV’s equity base expanded by 2.8% (or €39.5 million) to €1.45 billion, which translates into a net asset value per share of €2.253 (31 December 2024: €2.192, adjusted for the June 2025 bonus issue). BOV’s CET 1 decreased to 21.3% (31 December 2024: 22.3%) whilst its total capital ratio rose to 28.5% (31 December 2024: 27.1%).

Dividend

The board declared a net interim dividend of €35.7 million, which is equivalent to €0.0556 per share (adjusted H1 2024: €0.0545). The cash dividend represents a payout ratio of 40% and is payable to all shareholders as at close of trading on Wednesday 13 August 2025. Subject to regulatory approval, it will be paid on Tuesday 2 September 2025.

New Euro Medium Term Note Programme

The Board of Directors announced its intention to establish a Euro Medium Term Note Programme of up to €325 million. BOV plans to issue these notes to the general public and will seek admission to the official list of the Malta Stock Exchange. The proceeds will be used to enhance the Bank’s capital base in satisfaction of its Minimum Requirement for own funds and Eligible Liabilities (MREL) to support the Bank’s growth. The first tranche is expected to be launched by the end of 2025, with further information to be made available once regulatory approval is obtained.

Outlook

In his commentary, the Chairman noted that the Bank remains cautiously optimistic about the outlook for the Maltese economy. He highlighted a sustained pipeline of new credit, supported by a robust labour market and buoyant activity in real estate and tourism. He also remarked that potential repercussions from tariff wars are expected to have a comparatively smaller impact on Malta’s service-driven economy than on most other EU economies.

Based on developments in the first half of 2025, BOV updated its full-year financial outlook by adjusting upwards the lower end of the profit before tax guidance to €215 million (previously €200 million) and maintained the upper end guidance of €250 million.

BOV expects to maintain a dividend payout ratio (including the share buyback reserve) of 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 31 July 2025, Bank of Valletta plc published its interim financial statements covering the six-month period ended 30 June 2025.

Net interest income declined by 2.5% to €189 million compared to the record of €194 million reported in the same period last year. Gross interest income eased by 1.6% to €217 million reflecting the drop in the ECB benchmark rates when compared to the same period last year, which was also partly offset by higher income from the bank’s growing treasury portfolio and customer loan book. Meanwhile, the higher interest expense (+4.9% to €28 million) reflects the additional issuance of subordinated bonds towards the end of 2024.

Meanwhile, non-interest income surged by 39.4% to €55.3 million (H1 2024: €39.7 million) driven by increased net fee and commission income and gains from foreign exchange. Non-interest income also included a gain of €6.4 million from a one-off derecognition of a liability attributable to an update to the contractual terms with a third-party.

Total operating income amounted to €244 million, which is 4.6% higher than the €233 million in the same period last year.

Operating expenses increased by 23.2% to €117 million (H1 2024: €95 million) reflecting continued investment in personnel and technology reflecting the execution of several strategic objectives. Consequently, the cost-to-income ratio increased to 47.9% from 40.7% in the same period last year.

BOV’s financial performance was supported by a net impairment release of €3.3 million, which however was lower than the release of €5.2 million recorded in the same period last year. BOV highlighted that the non-performing loan ratio improved by nearly 40 basis points to 2.3%.

Moreover, BOV recorded a gain of €4.72 million from its share of results of associates, compared to €4.62 million in H1 2024.

Overall, BOV reported a profit before tax of €135 million, which is 8.8% lower than the €148 million reported last year. After accounting for a tax charge of €45.6 million, BOV’s net profit for the period amounted to €89.5 million, which translates into an annualised return on average equity of 12.5% (H1 2024: 15.0%).

The Statement of Financial Position as at 30 June 2025, when compared to 31 December 2024, shows that total assets rose by 5.4% (or €812 million) to €15.9 billion. BOV registered an 8.0% (or €551 million) growth in customer loans to €7.4 billion and 5.8% (or €368 million) growth in investments to €6.7 billion but held marginally lower levels of balances with the Central Bank, treasury bills and cash at €1.0 billion. Total liabilities increased by 5.6% (or €772 million) to €14.5 billion driven by an increase in customer deposits of 2.1% (or €263 million) to €13.1 billion and the recognition of the subordinated bonds issued towards the end of the reporting period. As a result, the loan-to-deposit ratio rose to 56.6% from 53.5%. BOV’s equity base expanded by 2.8% (or €39.5 million) to €1.45 billion, which translates into a net asset value per share of €2.253 (31 December 2024: €2.192, adjusted for the June 2025 bonus issue). BOV’s CET 1 decreased to 21.3% (31 December 2024: 22.3%) whilst its total capital ratio rose to 28.5% (31 December 2024: 27.1%).

Dividend

The board declared a net interim dividend of €35.7 million, which is equivalent to €0.0556 per share (adjusted H1 2024: €0.0545). The cash dividend represents a payout ratio of 40% and is payable to all shareholders as at close of trading on Wednesday 13 August 2025. Subject to regulatory approval, it will be paid on Tuesday 2 September 2025.

New Euro Medium Term Note Programme

The Board of Directors announced its intention to establish a Euro Medium Term Note Programme of up to €325 million. BOV plans to issue these notes to the general public and will seek admission to the official list of the Malta Stock Exchange. The proceeds will be used to enhance the Bank’s capital base in satisfaction of its Minimum Requirement for own funds and Eligible Liabilities (MREL) to support the Bank’s growth. The first tranche is expected to be launched by the end of 2025, with further information to be made available once regulatory approval is obtained.

Outlook

In his commentary, the Chairman noted that the Bank remains cautiously optimistic about the outlook for the Maltese economy. He highlighted a sustained pipeline of new credit, supported by a robust labour market and buoyant activity in real estate and tourism. He also remarked that potential repercussions from tariff wars are expected to have a comparatively smaller impact on Malta’s service-driven economy than on most other EU economies.

Based on developments in the first half of 2025, BOV updated its full-year financial outlook by adjusting upwards the lower end of the profit before tax guidance to €215 million (previously €200 million) and maintained the upper end guidance of €250 million.

BOV expects to maintain a dividend payout ratio (including the share buyback reserve) of up to 50%.