Bank of Valletta plc - Full-Year Results

On 27 March 2024, Bank of Valletta plc published its Annual Report and Financial Statements for the financial year ended 31 December 2023.

Performance Overview

Net interest income surged by 74% (or €150 million) to €352 million as gross interest income increased by 82% (or €181 million) to €401 million whilst interest expenses more than doubled (+€31 million) to €49 million. In this respect, BOV explained that the performance reflects the continued growth in lending portfolios combined with rising interest rates.

In contrast, BOV recorded a drop of 2.7% in non-interest income to €89 million as the decrease in trading profits offset the improvement in net fee and commission income and dividend income.

In aggregate, BOV’s total operating income increased by 50% (or 148 million) to €441 million compared to €293 million in 2022.

On the expenditure side, total operating costs increased by 9.5% (or €18 million) to €211 million reflecting the higher levels of administrative expenses and amortisation charges. BOV explained that the increases were driven by higher employee compensation and additional recruitment in specialised areas. BOV also allocated €11 million in strategic initiatives. In view of the notable growth in operating income, the cost-to-income ratio improved to 47.8% compared to 65.7% in 2022.

BOV’s financial performance was also boosted by the net impairment reversal of €10.5 million, which however was lower than the reversal of €49.1 million in 2022. The net release of expected credit losses was principally the result of the sale of Non-Performing Loans at the end of 2023. BOV explained that non-performing exposures as at the end of 2023 stood at 3.1% compared to 3.5% in the previous year.

Furthermore, the financial results did not include any litigation charges, in contrast to the €103 million net litigation settlement charge related to the Deiulemar case in 2022.

BOV’s share of results from associate investments (namely Mapfre MSV Life plc and Mapfre Middlesea plc) amounted to €11 million compared to a restated figure of €2.2 million in 2022.

Overall, BOV reported a profit before tax of €251.6 million (2022: €49.1 million adjusted to €152.0 million when excluding the effect of the Deiulemar settlement). After accounting for a tax charge of €83.7 million, the net profit amounted to a record of €167.9 million which translates into a return on average equity of 14.1%.

The Statement of Financial Position as at 31 December 2023 shows that total assets remained virtually unchanged at €14.5 billion as the increases in investments (+ €786 million) to €5.4 billion and customer loans (+€555 million) were offset by the lower balances with the Central Bank of Malta, treasury bills and cash (-€1 billion) and loans and advances to banks (-€198 million). Total liabilities eased by 0.9% (or €121 million) to €13.2 billion as the reduction in customer deposits (-€396 million) to €12.2 billion was partly offset by the higher amounts owed to banks (+€239 million) to €316 million. In view of the increase in customer loans and the reduction in customer deposits, the loan-to-deposit ratio climbed to 50.3% compared to 44.3% as at the end of 2022. Meanwhile, BOV’s equity base expanded by 14% to €1.27 billion which translates into a net asset value of €2.171 per share (31 December 2022 restated: €1.905 per share). The Bank’s CET 1 ratio increased to 22.7% (2022: 21.8%) and the Total Capital Ratio improved to 25.9% (2022: 25.4%).


The Board of Directors is recommending a final net dividend of €0.0455 per share to all shareholders as at close of trading on 26 April 2024 subject to regulatory approval and approval by the Annual General Meeting scheduled for 31 May 2024.

Coupled with the net interim dividend of €0.0300 per share paid in December 2023, the total net dividend attributable for the 2023 financial year amounts to €0.0755 per share, which represents a payout ratio of 26.3%.

Strategy Update

In their commentary, the Directors explained that 2023 marked the closing period of the three-year strategy which enabled the Bank to implement its transformation strategy. BOV explained that substantial investments in regulatory and mandatory projects were implemented, together with several other initiatives related to service delivery. The Bank has also been re-engineering processes to deliver service enhancements while providing customers with more efficient alternative channels. The Directors noted the continued migration from traditional to more modern alternative channels and payments.

Looking ahead, the Board of Directors approved a new strategy for the next three years to 2026. The key strategic thrusts revolve around the Bank’s personal and business customers, digitalisation, further strengthening of the Bank’s risk management control framework and enhancing the Bank’s human capital. In parallel, the Bank will be supporting initiatives in these areas by investing in its data management and analytical capabilities, digitalisation and embedding ESG in its business and operational model.