Bank shares its dividend plans following mid-year results announcement
Bank of Valletta recently hosted the Malta Association of Small Shareholders (MASS) at the House of the Four Winds in Valletta. This courtesy visit forms part of the Bank’s outreach program and its commitment to keep the market regularly updated with information that is of interest to its stakeholders. Key members of MASS were hosted by the Bank’s Chairman Dr Gordon Cordina, CEO Kenneth Farrugia and CFO Kevin Cardona.
During the meeting the Bank presented an overview of its financial performance for the first six months of the year, and shared key strategic initiatives being undertaken to sustain its current performance while positioning the Bank for future growth. An important topic of conversation to shareholders is the potential dividend distribution that shareholders expect following the announcement of the half year results. The Bank confirmed that the Board is in the process of compiling forward-looking data and conducting an analysis to consider the payment of a dividend out of the profit realised in 1H 2024. This is in line with the process followed last year and a formal announcement in this regard will be made in due course.
The Bank reiterated that dividend decisions at BOV are not based on a simple calculation but need to meet important risk and regulatory criteria, which focus on the strength and viability of the Bank’s future business. This is essential to safeguard the best interests of shareholders and wider stakeholders. In line with the Bank’s Dividend Policy, when proposing a dividend, the Board considers four important tenets, those of affordability (in terms of assessing current profitability and accumulated distributable reserves in the balance sheet), Regulatory Capital Adequacy (maintaining a sufficient level of capital and liquidity to comply with all relevant regulatory obligations and expectations mindful of the impact of CRR3 in January 2025), Growth Projections (demand for capital for business growth over the coming three year period), as well as shareholders’ reasonable expectations and market practices.
Other aspects of the Bank’s operations and strategy were discussed, including the importance of digital channels and how these are changing the way customers interact with Banks. The Bank confirmed that it maintains a good balance between physical presence and digital alternatives, offering customers convenience based on their individual preferences. It was also noted how cybersecurity is becoming ever more important in today’s world. In this respect the Bank continues to urge customers to be vigilant, never sharing their bank credentials over the phone, via email or through SMSs. On its part, the Bank continues to inform customers on the best way to protect themselves, while also introducing additional security measures, such as the recent introduction of AI in transaction monitoring that offers further protection against fraud.
A topical discussion centred on current geopolitical developments and how these are impacting the local economy and also Bank of Valletta. It was noted how conflicts always have an impact on world economies, with Malta being no exception. Interest rate developments also had an impact on banks. The Bank’s strategy has been to strengthen its Balance Sheet so that it can weather such storms, within a medium to long term approach to ensure longevity and sustained performance. This has been the Bank’s position in the recent past, one that continues to bear fruit as confirmed by its positive performance over the past eighteen months.
The Malta Association of Small Shareholders congratulated the Board and management team for the excellent results achieved to date. The association encouraged the senior bank officials to be generous with the shareholders in the next dividend payout. Members of MASS present for the meeting made various suggestions that would be of benefit to customers and shareholders. Such suggestions included waivers of fees related to SEPA wire transfers for transactions under €1,000 to incentivise customers to move to digital channels, the enhancement of information on the Bank’s website as well suggestions on the current deposit scenario and alternative investment and pension instruments available to customers. The Bank welcomes such suggestions and reviews such proposals in light of its current strategic position.
Speaking about the meeting BOV Chairman Dr Cordina said that “these outreach opportunities are very important as they confirm the Bank’s commitment towards transparency and our intent to keep the market and all our stakeholders updated with important information on the Bank and its operations”.