On 10 March, Lombard Bank Malta plc published its 2010 financial results revealing a 12.9% increase in profit attributable to shareholders after tax to €8.3 million. The improvement in profitability was mainly achieved due to the 10.1% rise in net interest income to €16.1 million as deposits continued to re-price in line with the current low interest rate environment. Moreover the Lombard Group registered a 4% rise in non-interest income as a result of (i) the continued strong revenue from postal sales; (ii) higher foreign exchange earnings and (iii) new business in investment services. The growth registered in both interest as well as non-interest income helped the Group achieve a record total operating income of €38.8 million.
On the other hand, the Lombard Group incurred a 4.5% increase in non-interest expenses to €24.5 million. Nonetheless, the larger growth rate in income helped the Group reduce its cost to income ratio from 64.4% in 2009 to 63.2% in 2010. At the Bank level, the cost to income ratio increased from 35.5% last year to 36.4% during the year under review. Impairment allowances amounted to €186,000 in in contrast to the reversals of €125,000 booked last year.
Total assets as at 31 December 2010 increased by 4.6% to €567.8 million mainly due to the rise in loans and advances to banks. Customer loans edged 1.8% higher to €333.7 million as “the Bank remained selective in its lending activity”. Deposits grew by 5.9% to €472.7 million resulting in an advances to deposit ratio of 71% compared to 73% in 2009. Shareholders’ funds increased by 11.5% during 2010 to €76 million (net asset value per share of €2.107).
The Directors recommended a final gross dividend of €0.115 per share (+15% over last year) to all shareholders as at the close of trading on 24 March. This dividend will be paid on 6 May following approval by shareholders at the upcoming Annual General Meeting to be held on 28 April. Unlike previous years, the Directors did not recommend a scrip option and as a result shareholders will all be paid a cash dividend.
Download a copy of the Lombard Bank Malta plc 2010 Preliminary Results