Lombard Bank Malta plc - Full-year Results & Dividends

On 17 February the Board of Directors of Lombard Bank Malta plc published the financial statements for the twelve-month period ended 31 December 2004. The comparative figures provided in the financial statements cover the fifteen-month period from 1 October 2002 to 31 December 2003, following the decision to change Lombard's year-end from 30 September to 31 December in 2003. The 2003 results were also annualised to give a more meaningful interpretation to this year’s financial performance.

During the twelve months ended 31 December 2004, the Lombard Group generated net interest income of Lm3.67 million, a 26.6% rise over the annualised interest income in 2003. The interest margin increased considerably from 33.9% to 43.3%. Non-interest income in 2004 amounted to Lm976,000 a 9.4% increase compared to the annualised non-interest income generated in 2003 of Lm892,000. Total operating income thus increased by 22.6% to Lm4.65 million over the 2003 annualised results. Non-interest income accounted for 21% of total income in 2004, down from 23.5% in 2003. Operating expenses incurred during the period under review totalled Lm2 million, a 14% drop compared to the expenses for the fifteen-month period between October 2002 and December 2003. On 2003 annualised results, operating expenses increased by 7.3%. The growth in income coupled with a drop in operating expenses further improved the cost to income ratio. This now stands at 43.2% compared to 49.3% in 2003. The Group profit before tax for the year ended 31 December 2004 amounted to Lm2.5 million representing a rise of 46.9% over the annualised pre-tax profits of 2003. After accounting for taxation and the loss attributable to minority interests, profit attributable to shareholders reads Lm1.56 million, translating in earnings per share of 38c, a 36% increase over the 27c8 annualised earnings in 2003.

As at 31 December 2004, customers’ deposits amounted to Lm164.6 million, a drop of Lm3 million (1.8%) compared to the level of deposits as at the end of December 2003. Meanwhile, loans and advances to customers increased by 20.4% (Lm11.7 million) to Lm69.1 million. Shareholders’ funds increased by 14.2% to Lm13.3 million resulting in a net asset value per share of 323c3. Compared to a current market price of 475c, the price to book multiple works out at 1.47 times. The 2004 return on equity works out at 12.5% with return on assets at 1.4%.

The Directors are proposing for approval at the forthcoming Annual General Meeting a gross dividend of 15c per share. In 2003, Lombard paid an interim dividend of 6c in October 2003 and a final dividend of 9c in April 2004 totalling a gross dividend of 15c per share for the fifteen-month period. The 2004 dividend has thus been maintained at 15c per share but signifies a 25% increase over the 12c annualised dividend for 2003.
The 2004 dividend is covered 3.88 times by profits implying a dividend payout ratio of only 25.7%. The dividend of 15c per share will be paid to all shareholders on the company’s register as at close of trading on Monday 28 February 2005. Consequently Lombard shares begin trading XD as from Tuesday 1 March. As in previous years, shareholders have the option of receiving the dividend either in cash or by the issue of new shares. The attribution price at which the new shares will be issued will be based on the trade weighted average price of the Bank’s shares for the three months up to and including 17 February 2005.