On 17 July, Bank of Valletta plc issued its Interim Directors Statement covering the Bank’s performance during the third quarter (April to June) of its current financial year ending 30 September 2012.
The Directors explained that during the period under review, the Bank continued to experience very subdued demand for new loans, both in the personal and corporate sectors, resulting in limited credit growth since the start of its financial year. Meanwhile, growth in customer deposits was sustained between April and June 2012. BOV also reported that net interest income has been satisfactory but commission and trading income remained subdued largely reflecting the uncertain conditions that continue to prevail across the Eurozone and global financial markets.
Overall, BOV reported that the cumulative operating profits from the start of the current financial year on 1 October to date are satisfactory and in line with expectations. Looking ahead, the Directors expect that economic growth during the three months ending 30 September 2012 will be sluggish at best both in Malta and in Europe. Moreover, further uncertainty and volatility is forecasted as no lasting resolution to the Eurozone debt crisis appears to be in sight. This may impact bond spreads and prices which in turn will affect the value of the Bank’s international bond portfolio. The Board also expects the prevailing low interest rate environment to persist for some time to come.
In the meantime the Bank will continue to maintain its deliberate prudent funding, asset quality, liquidity and capital adequacy policies.