The Bank of Valletta Group has just announced a strong and sustained financial performance for the nine months ending September 2024, with a profit before tax of €223.7 million, up by 36.9% over the same period last year. This positive performance is the result of the continuous expansion of loan portfolios, a drive to improve and diversify net fee and commission income, as well as the Bank’s continued focus on its balance sheet optimisation strategy.
The Group’s operating income increased from €315.9 million to €359.2 million compared to the same period in 2023. This is reflected in a 14.5% rise in Net Interest Income and a 5.4% increase in Net Fee and Commission income over the same period in 2023. The credit portfolio has also shown consistent growth, resulting in a 9.1% increase primarily due to sustained growth across all segments including business loans, home loans and personal loans. The positive performance was also prevalent on the asset quality side, where the overall non-performing exposures ratio decreased to 2.8% of total balances, as compared to 3.1% in December 2023.
The investments book maintained an upward trend and increased to €5.9 billion as a result of the purchase of high-quality paper instruments, generating interest income of €92 million over the nine-month period under review. Most of these investments are measured at amortised costs, aligning with the Bank business model to hold securities until maturity to collect interest revenues. On the liabilities side, customer deposits increased by 1% since the beginning of the year, with the increase coming from both personal and non-personal customers.
When excluding strategy related costs, operating costs registered an increase of 4.0% compared to the same period in 2023, aligned with the Group’s efforts to prioritise talent, compensation and benefits, technological advancements and regulatory compliance. In this vein, operational efficiency continues to attract a high level of focus, with the cost-to-income ratio standing at 42.1%, which is 4% lower than the 46.1% achieved in the same period in 2023, driven by cost management and procurement excellence initiatives.
The Group’s liquidity remains well above the minimum regulatory requirements, as do the Group’s capital ratios. Pre-tax Return on Average Equity stands at 22.5%, representing approximately an improvement of 3.8% over the equivalent number recorded in the same period last year. The net asset value per share at the end of the third quarter of 2024 stood at €2.4 per share as compared to €2.2 per share as at December 2023.
Sustaining BOV’s positive momentum – Dr Gordon Cordina, Chairman
BOV Chairman Dr Cordina expressed satisfaction on the Bank’s sustained performance. “Bank of Valletta has been on a positive trajectory for a good number of months. We have adopted strategies to ensure sustained growth in our core business areas, strengthening our balance sheet position, managing costs, improving operational efficiency, while focusing on customer centricity and sustainable growth. These results follow the recent announcement of an interim cash dividend of €0.0924 gross per share, as well as the €100 million 5% unsecured subordinated bond issue that closed within 2 days of launch following overwhelming response by investors.”
Speaking about the economic scenario, Dr Cordina commented, “The latest economic statistics and forecasts point to relatively benign conditions in Malta, with positive effects on the Bank’s business development initiatives and the quality of its assets. Looking forward, the Bank will continue to sustain economic growth within a wider development context of increasing productivity and investment in ESG dimensions, which are fundamental for longer-term business competitiveness and credit quality”.
Delivering strong financial and operational results – Kenneth Farrugia
CEO Kenneth Farrugia commented, “These results reflect the Bank’s efforts towards sustained growth and progress. We have continued to invest in technology, business process reengineering and above all, the customer experience, as part of our medium-to-long term transformation strategy. BOV has also made considerable progress in its ESG journey, setting ambitious emissions reduction targets, aligning with the latest reporting standards, and taking the leading role in influencing local businesses to transition to green. We have also been active on the personal front, with the launch of our Green Home First and Green Home Plus loan products.
Looking ahead, the Bank remains strongly committed to adapting its business and operational model to market dynamics, continue driving innovation across products, services and processes and foster an organisation-wide culture of service excellence. All these initiatives will enable the Bank to strengthen its focus on stakeholder value, customer centricity and operational efficiency, and equally sustain its performance in the years ahead of us.”
Both Dr Gordon Cordina and Kenneth Farrugia thanked customers, shareholders, and employees for their continued support and commitment to the Bank as it supports the growth and development of Malta’s economy and seeks to achieve its overarching goal of being the Bank of Choice and Employer of Choice in Malta.