Lombard profits surge on credit impairment reversal

 

The MSE Equity Price Index advanced by 0.52% to 3,676.604 points as BOV, Lombard, FIMBank and MPC registered gains whilst another five other companies closed the day unchanged. Overall trading activity in equities amounted to €0.05 million. Download today’s Equity Market Summary.

Lombard Bank Malta plc moved 1.1% higher to the €1.92 level across 2,000 shares. Today, Lombard reported a net profit of €11 million in the first half of 2022 (H1 2021: €3.45 million) as the Bank’s financial performance was boosted by a net impairment reversal of €12.1 million. On the other hand, Lombard reported a drop of 12.5% in operating income as the growth in net interest income and fee and commission income was outweighed by lower postal sales. During the first half of the year, loans and advances to customers increased by 9.6% (or +€61.9 million) to €704.8 million whilst customer deposits increased by 3.3% (or +€32.4 million) to €1 billion, thus leading to a marked improvement in the loan-to-deposit ratio to 69.8% compared to 65.8% as at the end of 2021.

Within the same sector, Bank of Valletta plc advanced by 2.9% to the €0.885 level on a total of 23,502 shares.

A single deal of just 1,000 shares lifted the share price of FIMBank plc 5.3% higher back to the USD0.20 level.

The other positive performing equity today was Malta Properties Company plc which added 3% to regain the €0.52 level on 11,620 shares. On Wednesday, MPC published its interim results showing continued growth in business on the back of the new income received from the lease of the recently acquired MIB Building located in Ta’ Xbiex. In fact, revenues increased by 5.7% to €1.95 million whilst operating profit climbed to €1.4 million compared to €1.3 million in the same period in 2021. Looking ahead, MPC explained that the Zejtun development is expected to be completed in 2022 whilst the renovation works to the Spencer Hill building are projected to be finished in early 2023. MPC also added that it continues to explore various acquisition opportunities.

Meanwhile, HSBC Bank Malta plc (2,595 shares) and Malta International Airport plc (1,986 shares) traded flat at €0.765 and €5.95 respectively.

Mapfre Middlesea plc stayed at the €1.75 level after opening at a low of €1.74 (-0.6%). A total of 1,920 shares changed hands.

M&Z plc held on to the €0.75 level across 2,799 shares.

Simonds Farsons Cisk plc also finished the day unchanged at the €7.70 level albeit on trivial volumes.

The RF MGS Index dropped by 0.57% to a two-week low of 953.277 points. Eurozone sovereign bond yields closed the week higher with the German 10-year Bund yield touching the 1% level again. Today, the Central Bank of Malta published its updated outlook on the Maltese Economy. The CBM expects Malta’s GDP to grow by 5.2% this year, 4.5% in 2023 and 3.7% in 2024. These latest forecasts represent minor downward revisions when compared to previous estimates reflecting the negative impact of high inflation coupled with the challenging international economic climate. In fact, inflation is expected to accelerate to 5.9% in 2022 and moderate to 3.8% and 2.1% respectively for the following two years. Meanwhile, the CBM anticipates lower levels of government deficit in the years under review when compared to the 7.9% deficit recorded in 2021, but the government’s debt-to-GDP ratio is expected to climb to 58.8% by 2024.

 

This report contains public information only and is not to be construed as investment advice or an offer to buy or sell any securities. Information contained herein is based on data obtained from sources considered to be reliable, but no representations or guarantees are made with regard to the accuracy of the data.  Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Rizzo, Farrugia & Co. (Stockbrokers) Limited is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange.