Bank of Valletta plc - Interim Directors’ Statement

On 4 May 2023, Bank of Valletta plc issued an Interim Directors’ Statement providing information about its performance in Q1 2023 when compared to the same period in 2022.

Revenues increased by 62% (or €36.6 million) to €95.5 million largely reflecting the growth in net interest income, which in turn was a result of a number of factors, namely, an increase in rates of Euribor-denominated loans, growth in the size of the loan book, higher effective rates on home loans that were temporarily granted competitive rates, and better returns from the securities markets. Meanwhile, net fee and commission income was lower when compared to the same period last year, mainly due to timing of specific services.

On the expenditure side, total operating costs increased by 2.8% mainly due to higher employee compensation costs and the modernisation of the Bank’s technology. BOV explained that strategy investment costs doubled as these were delayed in the previous year following more focus on regulatory commitments.

The financial performance was also boosted by the share of results from the Bank’s insurance associates, which had suffered from the volatility of the financial markets in Q1 2022.

Meanwhile, BOV’s financial performance was impacted by a net charge in Expected Credit Losses (ECLs) of €5 million reflecting the growth in the loan portfolio and an improved coverage for riskier exposures.

Overall, BOV recorded a profit before tax of €46.5 million compared to €22 million in the first three months of 2022.

In terms of financial position, when compared to 31 December 2022, customer loans grew by a further 1.5% to around €5.6 billion whilst customer deposits dropped by 2.3% to €12.3 billion. As a result, the loan-to-deposit ratio improved to 46% compared to 44.3% as at the end of 2022 and 42.3% as at 31 March 2022. BOV also noted that liquidity ratios remained strong and regulatory capital ratios continued to well-exceed regulatory capital requirements.


In its statement, BOV explained that the Bank is now in the last year of its BOV 2023 Strategy where the Bank is taking forward a number of initiatives across key strategic areas. In parallel, the Bank has initiated the formulation of a new strategy to cover the next three years.