Bank of Valletta plc - Full-Year Results

On 30 March 2023, Bank of Valletta plc published its Annual Report and Financial Statements for the financial year ended 31 December 2022.

Performance Overview

Net interest income increased by 29.2% (or +€45.6 million) to €201.9 million as gross interest income increased by 13% to €220.2 million whilst interest expense dropped by 52.4% to €18.3 million. In this respect, BOV explained that the continued strong growth in lending portfolios combined with rising interest rates boosted its net interest margin as the Bank also managed to further reduce the interest expenses.

BOV also recorded growth in non-interest income as this increased by 5.6% (or +€4.86 million) to €91.5 million. This was largely driven by the 35% increase in trading profits to €14.2 million and the 2.6% improvement in net fee and commission income to €76.6 million. Meanwhile, dividend income dropped to €0.64 million compared to €1.45 million in 2021.

In aggregate, BOV’s total operating income increased by 20.8% (or +50.4 million) to €293.4 million compared to €242.9 million in 2021.

On the expenditure side, total operating costs eased by 1.5% (or -€3 million) to €192.6 million as the reduction in general administrative expenses and depreciation and amortisation charges outweighed the increase in employee compensation and benefits. In view of the notable growth in operating income and marginal reduction in costs, the cost-to-income ratio improved to 65.7% compared to 80.5% in 2021.

BOV’s financial performance was also boosted by the net impairment reversal of €49.1 million compared to the reversal of €18.9 million in 2021. In this respect, BOV explained that the net release of expected credit losses were largely driven by the release of €24.9 million in COVID-19 provisions that were accounted for in previous years.

Meanwhile, the financial results were dented by the €103.0 million net litigation settlement charge related to the Deiulemar case.

Elsewhere, BOV’s share of results from associate investments (namely Mapfre MSV Life plc and Mapfre Middlesea plc) dropped to €1.86 million compared to €14.5 million in 2021, reflecting the negative market movements driven by the rising interest rates.

Overall, BOV reported a profit before tax of €48.7 million (2021: €80.7 million). Excluding the effect of the Deiulemar settlement, adjusted profit before tax amounted to €151.7 million. After accounting for a tax charge of €17.5 million, the Bank’s net profit amounted to €31.2 million (2021: €56.2 million) which translates into a return on average equity of 2.73% (2021: 5.1%).

The Statement of Financial Position as at 31 December 2022 shows that total assets grew by 1.1% (or +€159.7 million) to €14.5 billion as the increases in investments (+ €1 billion) and customer loans (+€462 million) outweighed the lower balances with the Central Bank of Malta, treasury bills and cash (-€1.2 billion). Total liabilities increased by 1% (or +€128 million) to €13.4 billion as the growth in customer deposits (+€371 million) and the new €350 million MREL securities issued towards the end of 2022 were partly offset by the lower amounts owed to banks (-€483million). Given that the increase in customer loans outweighed the growth in customer deposits, the loan-to-deposit ratio improved to 44.3% compared to 41.9% as at the end of 2021. Meanwhile, BOV’s equity base expanded by 2.8% to €1.16 billion which translates into a net asset value of €1.983 per share (31 December 2021: €1.929 per share). The Bank’s CET 1 ratio decreased marginally to 21.8% compared to 21.9% as at the end of 2021 whilst the Total Capital Ratio eased to 25.4% from 25.5% in the previous year.

Deiulemar Settlement

During 2022, the Bank reached an out of court settlement agreement, without admission of fault, which brought all legal claims surrounding the Deiulemar issue to an end. The net impact of this settlement to profitability in 2022 was €103 million whilst a total of €363 million in pledged assets were released and are free from encumbrance.


The Directors of BOV elected not to recommend any interim or final dividends. Despite the significant recovery in underlying profitability, the financial performance remained impacted by the cost of the Deiulemar settlement. The Directors noted that this is consistent with efforts to sustain the capital and liquidity strength of the Bank’s balance sheet, while also developing the capacity for further business growth over the coming years.


In their commentary, the Directors explained that during 2022, the Bank continued to implement its transformation strategy including digitalisation and simplification, whilst continuously improving the Group’s risk and control environment to ensure compliance with current, new and emerging regulatory requirements. Overall, the Directors reported that good progress was achieved in many areas, and further improvements are in the pipeline.

BOV’s CEO explained that during 2023, the Bank will develop and prepare a new three-year strategy plan – BOV2026. The strategy will revolve around Customers, Operations, Risk Management, and People, and will be enabled by Data and Digital led initiatives while ensuring that ESG is embedded within the business and operational model.