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Bank of Valletta plc – Quarterly Update

Jonathan Falzon

October 29, 2025

Market News
29 October, 2025
6 min read
Market News
29 October, 2025
6 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 29 October 2025, Bank of Valletta plc issued a Quarterly Financial Update providing information about its performance during the nine-month period ended 30 September 2025 when compared to the same period in 2024.

Net interest income decreased by 1.4% to €286 million (3Q 2024: €291 million) driven by a 12.7% increase in interest expenses to €43.9 million from €38.9 million last year, largely due to the total of €250 million in Tier 2 bonds issued in October 2024 and June 2025. Meanwhile, gross interest income remained practically unchanged at €330 million as the growth in the Bank’s investment portfolio and advances to customers offset the impact of the reduction in the ECB deposit rate facility.

Net fees and commission income climbed 9.5% higher to €61.9 million (3Q2024: €56.6 million). BOV also registered trading profits of around €9.9 million, which however is lower than the €11.8 million figure recognised in the same period last year.

Meanwhile, BOV’s financial performance was negatively impacted by a €5.2 million impairment charge (3Q 2024: net release of €9.5 million) which was driven by a mid-tier credit exposure which transitioned to non-performing during the quarter. However, the Bank expressed confidence that the charge will be reversed within the foreseeable future. The Directors also highlighted that the coverage ratio for credit impaired assets increased to 60.7% compared to 42.7% as at 31 December 2024 and that the non-performing loan ratio decreased to 1.9% from 2.7% at the end of last year.

Net operating income amounted to €360 million, which is 2.4% lower than the comparable figure of €369 million recorded in the first nine-months of 2024.

On the expenditure side, operating costs rose by 15.6% to €175 million on the back of further investments in human resources and technological advancements. As a result, the cost-to-income ratio stood at 47.9% compared to 42.1% achieved in the same period in 2024.

Meanwhile, BOV also recognised net profits of €7.0 million from its share of results of associates, compared to the figure of €6.3 million for the first nine months of 2024.

Overall, BOV recorded a pre-tax profit of €192 million, which is 14.2% lower than the €224 million generated in the same period last year. After accounting for a tax charge of €64.7 million, BOV’s net profit for the first nine months of 2025 amounted to €127 million, which translates into an annualised return on average equity of 11.6%.

The Statement of Financial Position as at 30 September 2025, when compared to 31 December 2024, shows that total assets increased by 6.4% (or €967 million) to €16.1 billion, principally composed of customer loans of €7.63 billion (+€784 million), financial investments of €6.86 billion (+€518 million), and cash balances of €0.93 billion (-€160 million).

Meanwhile, total liabilities increased by 6.8% (or €925 million) to €14.6 billion driven by increases in customer deposits (+€577 million), amounts owed to banks (+€150 million), and subordinated debt (+€154 million). The loan-to-deposit ratio increased to 57.0% from 53.5% as at the end of 2024.

Total equity increased by 2.9% (or €41 million) to €1.45 billion, which translates into a net asset value per share of €2.256 (31 December 2024: €2.192).

BOV explained that the Group’s capital ratios remained strong and above regulatory requirements, with a CET 1 ratio as at September 2025 of 21.9% (December 2024: 22.3%) and a total capital ratio of 29.1% (December 2024: 27.1%).

Outlook

The Directors maintain a cautiously optimistic outlook and reaffirmed the latest full-year financial outlook of a profit before tax of a range between €215 and €250 million, which translates into a double-digit return on equity.

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 29 October 2025, Bank of Valletta plc issued a Quarterly Financial Update providing information about its performance during the nine-month period ended 30 September 2025 when compared to the same period in 2024.

Net interest income decreased by 1.4% to €286 million (3Q 2024: €291 million) driven by a 12.7% increase in interest expenses to €43.9 million from €38.9 million last year, largely due to the total of €250 million in Tier 2 bonds issued in October 2024 and June 2025. Meanwhile, gross interest income remained practically unchanged at €330 million as the growth in the Bank’s investment portfolio and advances to customers offset the impact of the reduction in the ECB deposit rate facility.

Net fees and commission income climbed 9.5% higher to €61.9 million (3Q2024: €56.6 million). BOV also registered trading profits of around €9.9 million, which however is lower than the €11.8 million figure recognised in the same period last year.

Meanwhile, BOV’s financial performance was negatively impacted by a €5.2 million impairment charge (3Q 2024: net release of €9.5 million) which was driven by a mid-tier credit exposure which transitioned to non-performing during the quarter. However, the Bank expressed confidence that the charge will be reversed within the foreseeable future. The Directors also highlighted that the coverage ratio for credit impaired assets increased to 60.7% compared to 42.7% as at 31 December 2024 and that the non-performing loan ratio decreased to 1.9% from 2.7% at the end of last year.

Net operating income amounted to €360 million, which is 2.4% lower than the comparable figure of €369 million recorded in the first nine-months of 2024.

On the expenditure side, operating costs rose by 15.6% to €175 million on the back of further investments in human resources and technological advancements. As a result, the cost-to-income ratio stood at 47.9% compared to 42.1% achieved in the same period in 2024.

Meanwhile, BOV also recognised net profits of €7.0 million from its share of results of associates, compared to the figure of €6.3 million for the first nine months of 2024.

Overall, BOV recorded a pre-tax profit of €192 million, which is 14.2% lower than the €224 million generated in the same period last year. After accounting for a tax charge of €64.7 million, BOV’s net profit for the first nine months of 2025 amounted to €127 million, which translates into an annualised return on average equity of 11.6%.

The Statement of Financial Position as at 30 September 2025, when compared to 31 December 2024, shows that total assets increased by 6.4% (or €967 million) to €16.1 billion, principally composed of customer loans of €7.63 billion (+€784 million), financial investments of €6.86 billion (+€518 million), and cash balances of €0.93 billion (-€160 million).

Meanwhile, total liabilities increased by 6.8% (or €925 million) to €14.6 billion driven by increases in customer deposits (+€577 million), amounts owed to banks (+€150 million), and subordinated debt (+€154 million). The loan-to-deposit ratio increased to 57.0% from 53.5% as at the end of 2024.

Total equity increased by 2.9% (or €41 million) to €1.45 billion, which translates into a net asset value per share of €2.256 (31 December 2024: €2.192).

BOV explained that the Group’s capital ratios remained strong and above regulatory requirements, with a CET 1 ratio as at September 2025 of 21.9% (December 2024: 22.3%) and a total capital ratio of 29.1% (December 2024: 27.1%).

Outlook

The Directors maintain a cautiously optimistic outlook and reaffirmed the latest full-year financial outlook of a profit before tax of a range between €215 and €250 million, which translates into a double-digit return on equity.

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