Lombard Bank Malta plc - Interim Results

On 27 August 2025, Lombard Bank Malta plc published its interim financial statements covering the six-month period ended 30 June 2025.

Net interest income fell by 1.2% to €13.1 million as the growth in gross interest income (+7.4% to €19.7 million) was outweighed the higher level of interest expenses (+30.1% to €6.58 million). Lombard explained that the increase in interest costs reflect the competitive rates offered on longer-term deposits.

Non-interest income increased by 4.2% to €25.0 million reflecting the higher level of business of the Bank’s postal subsidiary MaltaPost plc, as well as growth in dividend income and trading profits. Meanwhile, net fee and commission income remained stable at €2.8 million.

On the expenditure side, operating costs increased by 3.8% to €28.5 million as the increases in employee compensation offset other operational efficiency measures. The cost efficiency ratio of the Bank stood at 54.4% (H1 2024: 51.5%), while that of the Group stood at 74.9% (H1 2024: 73.8%).

Lombard’s financial performance was also positively impacted by a net impairment reversal of €0.96 million, which however was lower than the reversal of €1.65 million recorded in the first half of 2024. The release was mainly from Stage 3 customer exposures.

As a result, the Group’s operating profit decreased by 7.7% to €10.5 million (H1 2024: €11.4 million).

The financial performance also benefitted from €2.43 million share of profits from associates, largely attributed to a one-off gain from the disposal of assets by an associate company.

The Group’s profit before tax increased by 13.9% to €12.9 million. After accounting for a tax charge of €3.85 million and non-controlling interests of €0.57 million, the net profit for the period attributable to shareholders amounted to €8.52 million (H1 2024: €6.71 million), which translates into an annualised return on average equity of 8.2% (H1 2024: 7.9%).

The Statement of Financial Position as at 30 June 2025, when compared to the corresponding figures as at 31 December 2024, shows that total assets remained virtually unchanged at €1.39 billion, despite that customer loans increased by 3.5% (or €30.9 million) to €904 million. Total liabilities also remained stable at €1.17 billion, but customer deposits fell by 1.1% (or €12.5 million) to €1.11 billion. As a result, the loans-to-deposits ratio climbed to 81.6% compared to 77.9% as at the end of 2024. Shareholders’ funds increased by 3.1% (or €6.4 million) to €216 million which translates into a net asset value per share of €1.397. The total capital ratio stood at 19.2% (31 December 2024: 20.0%), exceeding the minimum regulatory requirements.

Strategy Update

The Directors highlighted the investment in the retail network, infrastructure and insurance activities, in line with their strategic priorities. However, following an internal evaluation, it was determined that the proprietary funds project was no longer aligned with the Group’s evolving business strategy and will not be pursued further. Lombard will focus on its wealth management function instead.

The Group is also investing in technology to support ongoing efforts to meet regulatory requirements, as well as addressing evolving business needs and enhancing operational efficiency. A number of projects are currently progressing in areas such as wealth management, SWIFT and instant payments, card services, core banking system upgrades, and risk management.

Outlook

In their commentary, the Directors of Lombard stated that the outlook for the rest of the year remains cautiously optimistic with the Group remaining well positioned to pursue growth in line with its strategic priorities, underpinned by a robust financial position and proven track record. The Board explained that Lombard will continue to identify business opportunities arising from a growing local economy.