Bank of Valletta plc - Interim Results

During the six months ended 31 March 2004, the Group’s net interest income amounted to Lm18.4 million, an increase of 11.7% over the comparative period last year. The net interest margin has improved from 37.4% to 46.8%. Non-interest income also improved markedly during the period under review and increased by 9.7% to Lm8.7 million. Net fees and commissions income amounted to Lm4.6 million, a hike of 14.9% over last year. This increase in fees and commissions can be attributable to strong sales of collective investment schemes and life assurance products during the first six months of the current financial year.

Administrative expenses increased by 5.2% to just under Lm13 million whilst the charge for depreciation dropped from Lm1.8 million to Lm1.2 million. In total, non-interest expenses remained unchanged at Lm14.1 million. Compared to total operating income of Lm27.1 million, the Group’s cost to income ratio improved from 57.8% to 52.2%.

Net impairment allowances increased from Lm4.7 million to Lm6 million. The Group has implemented the requirements of Banking Directive BD09 which regulate allowances for impaired lending. The last tranche required to bring the BOV Group in full compliance with this Directive was made on 31 December 2003. The charge for the six months ended 31 March 2004 is considered as an expense pertaining to the current financial year, and is being recognised in the financial statements on a time apportionment basis.

Share of profits of associated companies, which include Middlesea Insurance plc and Middlesea Valletta Life Assurance Co. Ltd., show an increase from Lm814,000 to Lm1.1 million. Group profit before tax amounted to Lm8 million, 25% higher than the profit registered during the first six months of last year. After accounting for taxation and minority interest, Group profit attributable to shareholders amounted to Lm5.4 million, 23% up from the Lm4.4 million of March 2003. Earnings per share works out at 9c8 compared to 8c per share in March 2003. This figure has been restated to reflect the weighted number of shares that were in issue during the six months to 31 March 2004.

For the first time since BOV’s equity was listed on the Malta Stock Exchange in 1992, the Bank has declared the payment of an interim dividend. A gross dividend of 6c per share is being made to all shareholders on the share register as at close of trading on 6 May 2004. This dividend will be paid on 28 May 2004.

The Group's total assets as at the end of March 2004 amounted to Lm1,995 million (September 2003: Lm1,992 million). Loans and advances to customers, net of impairment allowances, rose by Lm33.9 million to reach Lm814.9 million. On the other hand, customers deposits remained stable at Lm1,428 million. Shareholders funds increased by Lm1.8 million during the period October 2003 to March 2004 and as at the end of March totalled Lm128.8 million. This translates into a net asset value per share of 232c4.

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