On 29 January 2010, Bank of Valletta plc published its Interim Directors’ Statement covering the period from the start of their 2009/10 financial year on 1 October 2009. The Directors stated that the operating profit for the three months ended 31 December 2009 has been satisfactory as net interest margin improved following the continued re-pricing of deposits while commission and trading income was ahead of expectations. Fair value movements for the period under review were marginal whilst the current economic environment resulted in an increased impairment charge although overall credit quality remained sound. The Bank continues to keep costs under tight control.
On the basis of Middlesea’s Rights Issue Prospectus published on 20 November 2009 and the subsequent announcement that revealed a deteriorating situation at the Group’s Italian subsidiary Progress Assicurazioni, BOV expects to report a negative charge with respect to the financial performance of its associate company.
On the Balance Sheet side the Bank continues to experience further growth in its deposit base whilst also continuing to provide credit to the economy in a responsible manner. Given the Bank’s prudent funding, asset quality, liquidity and capital ratios have also been maintained.
In conclusion, the Directors stated that in line with the Bank’s intention to use long-term bond issues more frequently as part of its funding programme, BOV will soon approach the market with a new bond issue during the second quarter of their current financial year. This issue which is subject to regulatory approval will coincide with the redemption of the existing €46.6 million 6.15% subordinated bond issue due on 15 March 2010. The Bank explained that this will provide existing bondholders with the opportunity to re-invest their redemption proceeds into the new issue.