Bank of Valletta plc - Quarterly Update

On 6 May 2024, Bank of Valletta plc issued a quarterly financial overview providing information about its performance in Q1 2024 when compared to the same period in 2023.

Net interest income surged by 33.7% to €98.3 million (Q1 2023: €73.5 million) as gross interest income increased by 32.4% (or €27.4 million) to €112.1 million whilst interest expenses increased by 23.7% (or €2.7 million) to €13.9 million. The net interest income in the first quarter of 2024 is in line with the level of the fourth quarter of 2023. BOV explained that the performance reflects the continued growth in lending portfolio, the deployment of excess liquidity in high quality treasury assets, and the benefit of the ECB Deposit Facility rate which remained fixed at 4% since September 2023.

BOV recorded a drop of 13% in non-interest income to €19.1 million (Q1 2023: €22.0 million) as the decrease in trading profits offset the improvement in net fee and commission income and dividend income.

In aggregate, BOV’s operating income increased by 22.9% (or €21.9 million) to €117.4 million compared to €95.5 million in the first quarter of 2023.

On the expenditure side, total operating costs increased by 6.8% to €49.1 million driven by higher employee compensation costs.

Furthermore, BOV’s financial performance was impacted by net impairment charges of €6.6 million, which is higher than the charge of €5.0 million recognised in the first quarter of 2023. BOV explained that the charge in the first quarter of 2024 related to a small number of entities which were assisted during periods of financial turnaround. The non-performing exposures ratio remained at 3.1%, in line with the December 2023 figure.

BOV also recorded unchanged profits of €2 million as a share of results from the Bank’s insurance associates.

Overall, BOV recorded a profit before tax of €63.7 million compared to €46.5 million in the first three months of 2023. The net profit for the period amounted to €42.2 million which translates into an annualised return on average equity of 13.1%.

In terms of financial position, when compared to 31 December 2023, total assets remained virtually unchanged at €14.5 billion as the growth in treasury investments (+ €262 million to €5.6 billion) and customer loans (+€187 million to €6.3 billion) was offset by the reduction in cash and balances held with the central bank (-€459 million to €1.9 billion). Total liabilities also remained largely unchanged €13.2 billion as the Bank reported a minor reduction in customer deposits (-€47 million to €12.1 billion). As a result, the loan-to-deposit ratio improved to 52% compared to 50% as at the end of 2023. Total equity increased by 3.2% (or €41.2 million) to €1.31 billion, which translates into a net asset value per share of €2.242. BOV also noted that liquidity ratios remained strong and regulatory capital ratios continued to well-exceed regulatory capital requirements.


In its statement, BOV remarked that the strong sanctioning levels of business and retail loans continue to position the Group for further growth. In particular, the Bank noted the strong underlying economic activity in Malta, with particular reference to record tourism figures and resilient property market. Furthermore, BOV explained that through its proactive restructuring of the balance sheet, the overall exposure to the ECB’s Deposit Facility was reduced to 20.5% as at the end of 2023 compared to 38.5% as at the end of 2021, and therefore the Bank will be less effected in the eventuality that the ECB reduces its interest rates.


BOV also provided an overview of its 2024-2026 strategy, which aims to enhance the operations of the Group in alignment with the business ambitions across personal, private, and corporate business areas. The priority is to improve customer relations, digitise internal operations, further strengthen the governance and risk management control framework, and continue investing in employees. During the first quarter of 2024, BOV worked on a change management program intended to improve regulatory compliance, internal processes, new products, and customer experience. The Group has also reaffirmed its commitment towards sustainability by responding to the increasing demand for ESG products.