On 26 October, Bank of Valletta plc published its full-year results covering the financial year ended 30 September 2012 showing a record pre-tax profit figure of €110.7 million (+72%).
BOV reported a 7.7% increase in net interest income to €147.8 million mainly reflecting the continued growth in loan and advances to customers which have now reached €3.7 billion. The Bank also continued to growth its deposit base to €5.8 billion in spite of intense competition.
Non-interest income grew significantly to €71 million mainly due to the turnaround in fair value movements from a write-down of €23.3 million in the previous financial year to a write back of €8.7 million in the financial year under review. Nonetheless, BOV continued to report growth in other core areas of its business particularly in card usage. Otherwise, net fee and commission income grew by 2% to €62.4 million.
On the other hand, the Bank incurred a 6% increase in non-interest expenses to €87.1 million mainly reflecting increased wages following the signing of a new collective agreement, continued investment in the Bank’s IT infrastructure as well as an increased contribution towards the Depositor Compensation Scheme.
The Bank also provided for €4.6 million in settlements to clients related to the Property Fund and the perpetual securities. This is lower than the €15 million booked last year in respect of the compensation paid to the La Valette Property Fund shareholders.
Loan impairments amounted to €22.8 million which mainly reflects a collective provision of €13.5 million with respect to specific sectors that are deemed to be more vulnerable to the overall economic environment. This is in line with the Bank’s prudent and cautious approach.
As a result, BOV reported an operating profit of €104.4 million, representing a 73% increase over the previous comparable figure.
Improvements were also reported from the Bank’s insurance associates with the Bank’s share of profits rising by 56.9% to €6.3 million. This led to a record pre-tax profit of €110.7 million compared to a pre-tax profit of €64.4 million in respect of the twelve months ended 30 September 2011.
After accounting for a tax charge of €36.5 million, BOV’s profit for the period under review amounted to just under €75 million compared to €41.7 million in the previous financial year. Earnings per share amounts to €0.278 (2011: €0.154).
The Directors recommended a record final gross dividend of €0.13 (net: €0.0845) per share payable to all shareholders as at the close of trading on Wednesday 14 November. Coupled with the interim dividend paid earlier this year of €0.06 (net: €0.039) per share, the final gross dividend amounts to €0.19 (net: €0.1235) per share representing a 50% increase over the previous year’s dividend.
The Board also recommended a 1 for 9 bonus share issue to all shareholders as at close of trading on Monday 14 January 2013 and will be funded through the capitalisation of €30 million of reserves.