Lombard Bank Malta 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 26 August 2026, Lombard Bank Malta plc published its interim financial statements covering the six-month period ended 30 June 2026.
Net interest income increased by 7.8% to €14.2 million as the growth in gross interest income (+10.7% to €21.8 million) outweighed the higher level of interest expenses in absolute terms, despite increasing at a faster pace (+16.4% to €7.66 million). Lombard explained that the growth in interest income was primarily driven by customer lending, complemented by investments in fixed-income instruments, while the increase in interest costs reflects both higher deposit volumes and the higher rates paid on longer-term deposits.
Non-interest income increased by 9.6% to €27.4 million, reflecting the higher level of business of the Bank’s postal subsidiary MaltaPost plc, whose postal sales and other revenues rose by 7.8% to €23.1 million on a steady performance across parcel and logistics-related activities. Net fee and commission income increased by 31% to €3.67 million, which Lombard attributed to higher business volumes across commercial and retail lending as well as wealth management activities.
As a result, operating income improved by 9.0% to €41.5 million (H1 2025: €38.1 million).
On the expenditure side, total operating costs increased by 5.0% to €30.0 million as employee compensation and benefits rose by 6.8% to €15.2 million amid a tight and competitive labour market, while other operating costs rose by 2.9% to €12.9 million. Since the growth in income outweighed the higher costs, the cost efficiency ratio of the Group improved to 72.1% (H1 2025: 74.9%) while that of the Bank improved to 49.1% (H1 2025: 54.4%)..
Lombard’s financial performance was also supported by a net release in expected credit losses of €0.04 million, which however was materially lower than the release of €0.96 million recorded in the first half of 2025.
As a result, the Group’s operating profit increased by 10.5% to €11.6 million (H1 2025: €10.5 million).
The Group registered a share of loss from associates of €0.11 million, compared to the share of profits of €2.43 million in the first half of 2025 which had largely reflected a one-off gain from the disposal of assets by an associate company.
As a result, Group’s profit before tax declined by 11.1% to €11.5 million. After accounting for a tax charge of €4.20 million and profits attributable to non-controlling interests of €0.67 million, the net profit for the period attributable to the shareholders of Lombard amounted to €6.64 million (H1 2025: €8.52 million), which translates into an annualised return on average shareholders’ funds of 6.0% (H1 2025: 8.2%).
The Statement of Financial Position as at 30 June 2026, when compared to the corresponding figures as at 31 December 2025, shows that total assets increased by 3.8% (or €57.4 million) to €1.55 billion. Customer loans and advances increased by 7.9% (or €73.6 million) to €1.00 billion, whilst balances with the Central Bank of Malta, treasury bills and cash stood at €144 million and financial investments at €229 million.
Total liabilities rose by 4.2% (or €53.2 million) to €1.32 billion, reflecting the 2.9% (or €35.1 million) increase in customer deposits to €1.24 billion. Given the stronger growth in customer lending, the loan-to-deposit ratio climbed to 82.9% compared to 79.6% as at the end of 2025.
Meanwhile, shareholders’ funds increased by 1.8% (or €4.03 million) to €227.7 million, which translates into a net asset value per share of €1.473 compared to €1.447 as at the end of 2025.
The Bank’s Total Capital Ratio eased to 18.0% (31 December 2025: 19.9%), which still exceeds the minimum regulatory requirements.
Strategy Update
The Directors highlighted the Group’s continued focus on digital transformation, operational efficiency and customer service. The planned replacement of the Bank’s legacy systems with a modern core banking platform and enhanced digital channels forms part of a wider programme aimed at improving service delivery and strengthening operational capacity in regulatory compliance and wealth management services. The Bank also continued to strengthen its physical distribution channels, complemented by sustained investment in human resources and compliance.
Outlook
In their commentary, the Directors of Lombard explained that the Group will continue to pursue measured growth, supported by a strong capital base, sound liquidity and ongoing investment in technology. The Board anticipates sustained stability throughout the latter half of 2026, driven primarily by the continuation of its cautious business strategy.
Meanwhile, Lombard noted that the traditional postal environment at MaltaPost is expected to remain challenging, while the potential impact of Customs tariff measures on cross-border postal and logistics activities continues to unfold. Nonetheless, MaltaPost remains on the lookout for new and diverse business opportunities.
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.