Lombard Bank Malta plc - Interim Results Publication

The Board of Directors of Lombard Bank Malta p.l.c. announced the financial results for the six months ended 30 June 2004.

During the first six months of the year the Lombard Group’s net interest income amounted to Lm1.65 million, a 13.7% rise over the Lm1.45 million generated during the period from January to June 2003. Whilst gross interest receivable decreased by 4.2% (Lm182,000), interest payable showed a 13.3% drop (Lm380,000). Lombard’s net interest margin has strengthened from 33.7% in June 2003 to a present 40%. The Group’s non-interest income of Lm508,000 represents a 34% increase over the comparative period due to a 26% increase in net fees and commissions receivable and a 33.9% rise in profits from trading activities. Lombard’s total operating income increased by 17.9% during the period under review to Lm2.2 million. Administrative expenses increased by 9.1% to Lm983,000, which according to the Directors, is largely due to increases in staff costs as well as overheads necessitated by upgrading of systems and operations. The charge for depreciation remained largely unchanged at Lm35,000. Lombard’s cost to income ratio has improved further and dropped to 47.2% compared to 51.2% in June 2003.

The Group’s operating profit before provisions for impairments and contingent liabilities amounted to Lm1.1 million (2003: Lm892,000). The charge for net impairment provisions dropped from Lm86,000 to Lm43,000, whilst in June 2003 there was a Lm93,000 provision for contingent liabilities and other charges which did not repeat itself this year.

Group profit before tax thus increased by 54.3% to Lm1.1 million. After accounting for taxation and a minimal loss attributable to minority interests, profits for the period amounted to Lm708,000, 51.3% above the profits in the first six months of 2003. Earnings per share increased from 11c7 to 17c5 per share.

The balance sheet as at the end of June 2004 reveals that whilst customers deposits dropped by 3% (Lm5.04 million) during the first six months of the year, loans and advances increased by 6.9% (Lm3.97 million). The Directors comment that this rise denotes "an appreciable increase in credit activity for the period under review". Group total assets amounted to Lm182.2 million as at 30 June 2004 compared to Lm176.7 million in June 2003. Shareholders’ funds of Lm12.4 million at the end of June translate into a net asset value per share of 302c2.

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