On 8 March 2007, Lombard Bank Malta plc published its Preliminary Statement of results for the year ended 31 December 2006. The Board of Directors have proposed a gross dividend of 12c5 per share (8c125 per share net of tax) for approval by shareholders at the Annual General Meeting due to be held on 25 April 2007. This represents a 25% increase over the dividend distributed in respect of the 2005 financial year. The dividend is payable to those shareholders as at close of trading on Tuesday 20 March 2007 for settlement Friday 23 March. As in previous years, shareholders will be given the option of receiving the dividend either in cash or by the issue of new shares.
The Lombard Group continues to adopt a strict focus on cost control with non-interest expenses only increasing marginally during the year to Lm2.2 million resulting in a very attractive cost to income ratio of 35.1% (2005: 38.2%). The Group’s operating profit before impairment allowances and other provisions increased by 14.8% during 2006 to Lm4 million. During the year, the Group’s net impairment allowances amounted to Lm122,000 reflecting “the Bank’s determination to apply a prudent policy with regard to the management of its credit portfolio”. On the other hand in 2005 the Group had recognised a net impairment reversal of Lm290,000. Share of profits from the Group’s 35% investment in Maltapost plc amounted to Lm5,000. In August 2006, Lombard Bank announced the acquisition of a 35% shareholding in Maltapost plc from Transend Worldwide Ltd. of New Zealand. The cash flow statement shows that Lombard’s total investment for this minority shareholding amounted to Lm1.1 million.
During the twelve months ended 31 December 2006 the Lombard Group generated a pre-tax profit of Lm3.9 million, a rise of 5.5% over 2005. After accounting for taxation and the profit attributable to minority interests, the profit attributable to shareholders amounts to Lm2.5 million. Earnings per share increased to 29c5 from 28c3 in 2005 which has been adjusted to reflect the 2 for 1 share split in 2006.
As at 31 December 2006, the total assets of the Lombard Group amounted to Lm205.8 million, a rise of Lm17.8 million reflecting increased loans to customers (+Lm11.5 million or 14.6%) and higher balances with the Central Bank of Malta, holdings of Treasury Bills and cash (+Lm14.7 million or 50%). The Group’s deposit base increased by Lm14.8 million (9%) during the year to a level of Lm180.6 million. The loans to deposits ratio continued to increase gradually and stood at 50% at the end of 2006 compared to 48% in 2005. Shareholders’ funds increased by 14.8% to Lm19.1 million resulting in a net asset value per share of Lm2.24.
The Group’s profitability ratios edged marginally lower in 2006 with a pre-tax return on equity of 21.6% (2005: 22%) and a post-tax return of 14% (2005: 15.75%). Similarly the Group’s return on assets in 2006 of 1.96% compares to 1.98% the previous year.