Bank of Valletta Group announced its results for the year ended 31 December 2019. Pre-tax profit for the year, adjusted for the litigation provision and transformation costs is €138.1 million, or 6% below the comparative number. Customer deposits grew by 2.1% to €10.6 billion; local retail economic growth has driven up domestic balances whilst international corporate deposits have reduced by 24%.
- Profit before tax of €89.2 million, a post-tax ROE of 6.2%
- Profit before tax, stated before the increased litigation provision of €25 million and additional transformation costs of €23.9 million, amounts to €138.1million
- Earnings Per Share of 10.9 cents, Shareholders’ equity of €1.1 billion
- Core Equity Tier One ratio increased by 120bps to 19.5%
- A net dividend of 1.71 cents per share is recommended
Tough times ahead
Referring to the current COVID-19 crisi, BOV CEO Rick Humkin said that “There is no doubt the next few months are very uncertain and undoubtedly everyone in Malta will be affected in some way. The outbreak is expected to have a substantial negative impact on both global and local economies. BOV’s capital buffers, together with measures made available by the regulatory authorities provide significant mitigation against the additional challenges of this unprecedented event. An adverse influence on 2020 performance is highly probable but a clear determination of the overall financial impact cannot be made at this early stage. There are uncertainties on both the duration of the crisis and the extent of the impact on the local economy as well as the scale and effectiveness of mitigating measures provided by local and EU authorities. The Bank has already taken steps and intends to launch further initiatives to continue to support the local economy as well as to help safeguard the well-being of its employees and its customers.”
A year of many challenges
Although 2019 presented many challenges for the Bank, BOV is pleased to report on a strong set of results performance has strengthened the Bank’s capital position as it built upon a significant de-risking programme, supported by tangible improvements in our risk, governance and control frameworks.
The bank said that a strong performance in the local economy has helped net loans and advances to increase by €88 million, primarily in the consumer finance portfolio, which includes home loans. In the SME segment, we have also seen growth, supported by the various funding schemes made available to small businesses.
Commenting on the results, CEO Rick Hunkin said: “2019 was a pivotal year for the BOV Group, with strong results being reported. We successfully delivered the implementation of the new Core Banking System, continued with our de-risking initiatives and strengthened our control functions. At the same time we continued to provide our customers with innovative digital banking services and supported a wide range of businesses across the Maltese economy.
At the current time, all of our minds are on the extraordinary challenges brought about by COVID-19. So far at Bank of Valletta, our staff have continued to serve our customers and we have kept all our branches and operations going with their help and commitment. My thanks, as always, go to our loyal and hardworking teams here at BOV.”