Lombard Bank Malta plc - Full-Year Results

On 8 March 2018, Lombard Bank Malta plc published the results for the financial year ended 31 December 2017.

Performance Overview

During the period under review, the Group registered a growth of 8.7% in net interest income to €15.4 million (FY2016: €14.2 million), reflecting an increase of 2.5% in gross interest income to €21.4 million (largely on the back of the substantial increase in customer loans) whilst interest expense dropped by a further 10.6% to just under €6 million. As a result, the net interest margin climbed to an all-time high of 72% from 67.9% in 2016.

Non-interest income climbed by 28.4% to €42.4 million over the previous comparable period which also included a one-time gain of €1.29 million related to the sale of shares previously held in Visa Europe. The growth in non-interest income was largely driven by the near 40% increase (or +€10.6 million) in postal services as the decline in letter mail volumes was offset by growth in e-commerce traffic. In addition, Lombard also posted an 8.6% increase in net fee and commission income to €4.13 million reflecting higher volumes in transaction banking.

On the expenditure side, administration costs surged by 34.6% to €44.6 million, mainly reflecting the increased business in postal services, higher compliance and regulatory costs, as well as increased investments in IT and automated services. In contrast, impairment allowances dropped by 28.2% to €2.84 million (FY2016: €3.95 million). In this respect, the Bank also noted its prudent approach to quantifying impairment allowances.

Overall, Lombard registered a pre-tax profit of €8.87 million which is almost 28% higher than the normalised pre-tax adjusted figure of €6.95 million for the previous comparable period. After taking into account a tax charge of €3.17 million and minority interests of €0.57 million, the profit for the year of Lombard amounted to €5.13 million which translates into an earnings per share of €0.116 (FY2016: €0.107).

The Statement of Financial Position shows that total assets rose by 2.3% to €882.7 million as the near 25% increase in customer loans (or +€85.1 million) outweighed the decline in the amounts held in investments (-€4.62 million) and loans and advances to banks (-€64.7 million). Similarly, total liabilities also increased by 2.3% to €779.9 million, largely reflecting the 1.6% growth (or +€11.6 million) in customer deposits to €733.2 million. However, given the much larger increase in customer loans, the loan-to-deposit ratio improved to 58.5% compared to 47.6% as at 31 December 2016. Meanwhile, shareholders’ funds increased by 2.4% to €96.1 million. This translates into a net asset value per share of €2.176 (31 December 2016: €2.124). The return on average equity advanced to 5.4% compared to 5.2% for 2016. On the other hand, the Bank’s capital ratios eased lower but still remained well above the minimum regulatory requirements. In fact, the Common Equity Tier 1 (“CET 1”) ratio dropped to 14.1% from 16.2% as at 31 December 2016, whilst the Total Capital Ratio declined by 2.5 percentage points to 14.3%.


The Directors are recommending the payment of an unchanged final gross dividend of €0.04 per share (€0.026 net of tax) which represents a payout ratio of 22.4% (FY2016: 24.2%). Shareholders as at the close of trading on Friday 23 March 2018 will be eligible to receive the dividend on Friday 4 May 2018 subject to shareholders’ approval at the upcoming Annual General Meeting scheduled to be held on Thursday 26 April 2018.


Lombard Bank Malta plc – Preliminary Profit Statement for the financial year ended 31 December 2017.