During the twelve months ended 30 September 2004, the BOV Group generated Lm40.9 million in net interest income, an increase of 18.1% over the Lm34.6 million during the same period last year. The net interest margin improved from 38.2% to 47.9%.
Non-interest income increased by Lm617,000 (3.4%) to just under Lm19 million resulting in total operating income of Lm59.9 million, 13% above the total income generated during the year ended 30 September 2003.
Non-interest expenses, comprising administrative expenses and depreciation charges totalled Lm29.4 million, 8.5% higher than the expenditure incurred in 2003. The Directors attribute this increase to higher retirement benefits.
The charge for net impairment allowances amounted to Lm13.4 million, an increase of Lm1.2 million over the allowance taken in September 2003. This provision includes a final allocation in an exercise that has now been fully carried out by the Bank, bringing its impairment allowances in line with standards required by local legislation. Impairment allowances are provisions which the Bank prudently sets aside to make good for any potential losses in the future.
Share of profits from associated companies, which include Middlesea Insurance plc and Middlesea Valletta Life Assurance Co. Ltd., increased by 28.9% to Lm1.4 million.
Despite the increase in costs, the cost to income ratio improved from 51.2% in September 2003 to 49.1%. If one were to include in the total income the profits generated from the associate companies, this ratio improves further to 48%, the lowest level since September 1996.
Group profit before tax increased by 24.5% (Lm3.6 million) to Lm18.4 million. After accounting for taxation and minority interests, Group profit attributable to shareholders amounted to Lm11.7 million, 12.8% up from the Lm10.4 million of September 2003. Earnings per share increased from 18c7 in September 2003 to 21c1.
The Board of Directors is recommending to shareholders at the next Annual General Meeting (scheduled for 17 December 2004) a gross final dividend of 10c per share (6c5 net of tax). Coupled with the interim dividend of 6c per share paid in May 2004, the total dividend for the year works out at 16c per share (10c4 net). All shareholders on the company’s register as at close of trading next Friday 5 November will be entitled to attend the AGM and receive this final dividend, which is expected be paid on 18 December 2004. The shares begin trading XD as from Monday 8 November 2004.
The balance sheet as at the end of September 2004 shows Group total assets of Lm2,035 million. Customer deposits increased by 2.1% (Lm30.3 million) to Lm1.46 billion. Net advances to customers grew by 5.8% (Lm45 million) to Lm826.1 million. Shareholders funds increased by 2.2% to Lm129.8 million, resulting in a net asset value per share of 234c.