The bank reported a profit before tax of €44.4 million for the six months ended 30 June 2026, down from €58.7 million in the corresponding period last year. Excluding notable one-off items, adjusted profit before tax stood at €51.7 million, reflecting the impact of a lower interest rate environment, market volatility and exceptional expenses.

Despite the decline in profitability, HSBC Malta’s management emphasised that the underlying business remains strong, supported by growing customer activity, expanding lending volumes, increasing deposits and exceptionally robust capital and liquidity ratios.

Speaking following the presentation of the bank’s half-year results, CEO Geoffrey Fichte told the Malta Business Weekly that preparations for the transition to CrediaBank are progressing smoothly and remain on schedule.

“The transition is going very well,” Fichte said. “We are working very closely with HSBC Global and CrediaBank to make sure the transition is a success. We are very enthusiastic and motivated, and we are committed to a seamless transition for our customers.”

The acquisition, first announced in September 2025, will see Greek lender CrediaBank acquire HSBC Continental Europe’s 70 per cent shareholding in HSBC Malta for €200 million. The agreement was formally signed in December 2025 and remains subject to the necessary corporate and regulatory approvals.

Fichte said the bank expects regulatory approval during the final quarter of 2026, with completion anticipated approximately six months later.

“We expect the transaction to close during the second quarter of next year,” he said.

Reassurance for customers

With many customers closely following developments surrounding the ownership change, Fichte sought to reassure clients that the bank remains financially strong and fully committed to serving the Maltese market throughout the transition.

“We think clients have nothing to worry about,” he said.

Pointing to the bank’s latest financial results, Fichte noted that HSBC Malta continues to maintain the highest capital and liquidity ratios among Malta’s listed banks, with capital levels also ranking among the strongest across Europe.

“We have a very strong team that’s staying on, and we are committed to a smooth transaction. We are very much open for business, so we think clients have nothing to worry about. In fact, we hope they’ll be as excited as we are about the future.”

Addressing questions during the results presentation, Fichte also rejected suggestions that the transaction was facing delays, arguing that regulatory approval processes of this nature typically require time.

According to the CEO, the transaction is progressing faster than comparable banking acquisitions elsewhere in Europe.

He added that HSBC Malta remains confident of delivering what management describes as “a seamless transition and upgrade” under CrediaBank, with continued support from the Board of Directors.

Strong underlying performance

While reported profits declined year-on-year, HSBC Malta highlighted solid underlying business momentum across several core activities.

Net interest income fell by €4.3 million to €85.6 million, reflecting the lower interest rate environment compared with the exceptionally favourable conditions experienced in 2025.

Non-funded income also declined slightly, although fee income increased thanks to higher lending activity and stronger wealth management sales. Trading income moderated following an exceptionally strong comparative performance in the previous year.

Operating expenses increased to €65.9 million, largely driven by €7.3 million in notable items, including accelerated software amortisation and staff-related payments linked to the industrial dispute with the Malta Union of Bank Employees (MUBE).

The bank also benefited from a €6.5 million release of expected credit losses, supported by the recovery of a long-standing non-performing corporate loan and improved credit quality within its retail portfolio.

Despite continuing geopolitical uncertainty globally, HSBC noted that Malta’s domestic economy remained resilient.

Lending growth continues

The bank continued expanding lending across both retail and corporate segments despite heightened competition.

Retail lending increased by 27 per cent during the first half of the year compared with the same period in 2025, while new corporate lending surged by 75 per cent.

Business financing remained particularly strong across hospitality, real estate, retail and manufacturing, with HSBC indicating that a healthy lending pipeline is expected to support further growth over the coming months.

Although total customer loans declined marginally to €2.7 billion due to repayments and portfolio optimisation, the quality of the loan book continued improving.

Non-performing loans fell by six per cent and now stand at their lowest level in recent years.

Customer deposits remained broadly stable at €6.2 billion, with retail deposits increasing despite seasonal reductions in corporate balances.

Strong capital position

Perhaps the bank’s strongest message was its continued financial resilience.

HSBC Malta reported a Common Equity Tier 1 capital ratio of 24.7 per cent and a total capital ratio of 27.8 per cent as at 30 June 2026, comfortably exceeding regulatory requirements.

Liquidity also remained exceptionally strong, providing the bank with significant capacity to continue supporting customers while navigating the ownership transition.

Reflecting this strength, the Board declared another quarterly interim dividend of €0.043 gross per share, amounting to €15.5 million.

Combined with the first-quarter dividend of €0.036 per share, shareholders will receive total gross dividends of €0.079 per share for the first half of 2026, equivalent to €28.5 million.

The latest payment represents a 60 per cent payout of adjusted profits after accounting for employee benefit expenses related to the industrial dispute.

Wealth and insurance

HSBC Malta also continued strengthening its wealth management and insurance businesses.

Wealth investment sales recorded double-digit growth year-on-year as customers increasingly sought long-term savings and investment products.

During April, the bank introduced eight additional Target Dated Funds to its HSBC Life pension platform, expanding retirement planning options for customers.

HSBC Life Assurance (Malta) reported profit before tax of €1.9 million compared with €6.5 million during the same period last year, reflecting more challenging market conditions and movements in financial markets.

Nevertheless, the insurer maintained a strong solvency ratio of 252 per cent while continuing to generate new business across protection and long-term savings products.

Continuing investment

Alongside financial performance, HSBC Malta continued investing in customer service and infrastructure.

The refurbishment of its Rabat branch was completed during the first half of the year, while modernisation works have commenced at the Gżira branch.

The bank also maintained investment in digital services, customer support and credit processing, while continuing marketing initiatives focused on lending, wealth management and insurance solutions.

Within corporate banking, HSBC renewed its Gold Sponsorship Agreement with The Malta Chamber of Commerce, Enterprise and Industry, reaffirming its support for Malta’s business community.

Earlier this year, HSBC Malta was also recognised with the Environment and Resources Authority’s Corporate Award for Environmental Innovation and Sustainability for the €30 million sustainable redevelopment of its Qormi headquarters.

Looking ahead

As HSBC Malta prepares for its next chapter under CrediaBank ownership, management believes the bank is entering the transition from a position of considerable financial strength.

“Our adjusted profit, strong capital and liquidity ratios, growing transaction volumes and continued momentum across customer acquisition and lending leave us well positioned for the future,” Fichte said.

With regulatory approval expected later this year and completion targeted for the second quarter of 2027, HSBC Malta says its immediate priorities remain unchanged: supporting its 180,000 customers, maintaining business growth and ensuring a smooth transition for employees, customers and shareholders alike.

The post HSBC Malta posts resilient first-half results as CEO expects CrediaBank takeover to close in Q2 2027 first appeared on The Malta Business Weekly.

While several sectors experienced a moderation in growth, the Central Bank noted that the overall picture remains one of resilience, supported by strong consumer confidence, a robust labour market, healthy tourism activity and relatively stable conditions in the property market.

The Bank’s Business Conditions Index showed that annual growth in business activity during June was slightly below its historical average. However, this was largely attributed to timing effects related to tax revenue rather than a broad-based slowdown in economic performance.

Manufacturing and retail trade both registered slower growth during May, while services production eased in April. Nevertheless, activity in all three sectors remained above their respective long-term averages, suggesting that underlying economic conditions continue to be favourable.

Tourism continued to stand out as one of the strongest performing sectors, recording sustained growth during May and providing continued support to the wider economy.

One of the report’s most encouraging findings was the sharp improvement in consumer sentiment. Confidence among consumers rose significantly during June, reaching levels close to historic highs. At the same time, expectations regarding unemployment declined further, falling below their historical average and reflecting continued optimism about labour market conditions.

The labour market itself remained exceptionally strong. Malta’s unemployment rate stood unchanged at 3.5% in June compared with the previous month, although marginally higher than the exceptionally low level recorded during the same period last year.

Inflationary pressures also continued to ease. Annual inflation based on the Harmonised Index of Consumer Prices (HICP) declined from 2.1% in May to 2.0% in June, placing Malta comfortably below the euro area average, where energy prices continued to exert upward pressure on inflation. Core inflation, which excludes food and energy, stood at 2.2% and likewise remained below the euro area figure.

Meanwhile, the Retail Price Index (RPI) showed inflation easing further to 2.5% during June, reinforcing signs that price pressures are gradually moderating.

The property market continued to display resilience despite mixed signals. On the supply side, approved permits for residential developments increased compared with the same month last year, while commercial building permits declined. Demand indicators presented a mixed picture, with residential promise-of-sale agreements falling year-on-year during June, although final deeds of sale increased, suggesting that completed transactions remain healthy.

On the public finance front, the Consolidated Fund recorded a deficit in May, contrasting with a surplus during the corresponding month in 2025. The Central Bank attributed this primarily to the timing of income tax receipts together with increased capital expenditure by government.

Financial conditions also remained broadly supportive. The annual growth rate of deposits held by Maltese residents accelerated during May, while credit growth remained broadly unchanged from April, indicating continued stability in household and business financing.

Overall, the Central Bank’s latest assessment suggests that while the pace of economic expansion has moderated, Malta’s economy continues to demonstrate solid underlying fundamentals. Strong consumer confidence, resilient employment, easing inflation and sustained tourism activity continue to underpin economic performance, even as certain sectors return to more sustainable growth rates.

The post Malta’s economy holds firm despite slower momentum, CBM says first appeared on The Malta Business Weekly.

APS Bank participated in a panel discussion entitled Regulatory Value Enablers in the Digital Frontier, held as part of Tech Law Seminar 2026 on Wednesday 6 May 2026. Discussions focused on how new European regulations are driving innovation across the financial services sector, helping organisations deliver simpler onboarding processes, stronger security measures and improved digital services.

Head of Development and Innovation Ronald Psaila represented APS Bank, sharing a banking perspective on developments in digital identity, customer onboarding and fraud prevention, and their potential to enhance the customer experience. He also discussed the practical challenges associated with upcoming regulatory requirements, particularly the Payment Services Regulation, highlighting the need for banks to complement customer education with timely interventions and safeguards that help prevent fraud.

APS Bank also participated in the Central Bank of Malta’s annual Forum for Financial Stability, held on Friday 19 June 2026 at Binja Laparelli. The Forum, entitled Financial Stability: Balancing Resilience and Complexity, provided a platform for discussion on emerging challenges and developments shaping financial stability in Malta.

Representing APS Bank, Chief Risk Officer Giovanni Bartolotta contributed to a panel discussion focusing on emerging risks brought about by digitalisation, including third-party risk and EU tech sovereignty.

Corporate Schemes Manager Mark Lamb was a guest speaker at the final Investment Masterclass of the year, hosted by financial coach Patrick Debattista on Saturday 27 June 2026 at the Salini Hotel. Supported by APS Bank, the event attracted its highest attendance to date and covered topics including money management, financial planning and investing. Mr Lamb’s session explored the role of pensions in long-term financial planning, highlighting their tax advantages and encouraging attendees to make them a key part of their financial future.

Through these engagements, APS Bank continues to share its expertise and contribute to conversations that support a more resilient, innovative and financially informed community.

The post Financial stability, digital innovation and financial wellbeing discussed by APS Bank representatives first appeared on The Malta Business Weekly.

Against an uncertain global backdrop due to the Middle East conflict, the Maltese economy is expected to present some degree of resilience to these effects in 2026, though a marginal delayed impact on GDP and prices is envisaged to materialise in 2027.

Growth over the projection horizon is expected to be led by private consumption, which is projected to continue to grow at a brisk pace, in part supported by recent changes to income tax bands.

Employment growth is expected to moderate gradually to 2.3% by 2028. The unemployment rate is forecast to edge down to 2.9% over the projection horizon.

Wage growth is set to remain strong, driven by labour market tightness, but is set to ease to 3.9% in 2028 from 4.2% last year.

HICP inflation is projected to be impacted by the war in the Middle East, primarily through the channel of higher imported inflation, particularly in goods and food components as continued fiscal support mitigates the propagation of the energy shock on domestic energy prices. Overall HICP inflation is thus projected to increase to 2.5% in 2026 and is set to remain at that level in 2027. It is then expected to ease to 2.2% in 2028, driven primarily by lower services and NEIG inflation. Compared to the Bank’s previous forecast publication, overall HICP inflation has been revised up by 0.2 percentage points in 2026 and 2028 and by 0.4 percentage points in 2027.

The general government deficit-to-GDP ratio is projected to continue to decline over the forecast horizon, albeit in a more gradual manner. It is set to narrow to 1.9% in 2026, 1.7% in 2027 and to 1.6% by 2028. The general government debt-to-GDP ratio is expected to decline further from 46.4% in 2025 to 46.0% in 2026 and subsequently to 44.1% by 2028. 

Risks to growth are tilted to the downside. These risks largely emanate from the uncertainty surrounding the duration and intensity of the conflict in the Middle East which may lead to a weaker external environment and hence a more subdued trajectory in foreign demand. Disruptions to transport through the Strait of Hormuz have also raised concerns on fuel shortages in trading partner countries which may negatively impact tourism, aviation and the shipping industry. However, this downside risk to tourism could be mitigated potentially by the redirection of tourists towards safer destinations like central and western Mediterranean.

Risks to inflation are tilted to the upside over the projection horizon. Upside risks to inflation primarily reflect stronger disruptions to energy markets than assumed in the technical assumptions. Although the direct impact on domestic energy prices continues to be mitigated by the Government’s commitment to its fixed energy price policy, higher than envisaged global energy prices could generate stronger imported inflation, with potential further amplification via indirect effects on wages and profit margins. Inflation could also be higher than expected if supply disruptions were to spread to non-energy markets, although alternative supplies from other regions could mitigate this effect.

On the fiscal side, risks are assessed to be tilted to the downside (deficit-increasing). These predominantly stem from the possibility of slippages in current expenditure, notably higher-than-expected spending on energy support measures should commodity prices exceed assumptions. These risks are partly mitigated by the likelihood of higher-than-forecast increases in tax revenue, brought about by additional improvements in tax administration.

The post Central Bank forecasts growth to remain resilient despite global uncertainty first appeared on The Malta Business Weekly.

During the period, the Group delivered a resilient core operating performance, supported by strong capital and liquidity positions. Solid business activity sustained core income, with net interest income benefiting from continued lending growth and disciplined treasury management, underpinned by a stable, high‑quality funding base. Net Fee and Commission Income remained stable, reflecting strong customer activity and reinforcing the Group’s income diversification strategy.

The bottom line profitability was shaped by specific, non‑recurring factors, including heightened geopolitical tensions that led to increased financial‑market volatility. While not impacting the Group’s core operating activities, customer behaviour or portfolio performance, this resulted in an unrealised valuation impact on the equity investment portfolio. Consequently, a net trading loss of €3.6 million was recorded when compared with a gain of €5.5 million in 2025. This was not material and did not affect the Group’s capital strength or liquidity position.

Profitability was also influenced by higher impairment charges, reflecting specific and identifiable credit developments rather than a deterioration in the broader credit environment. The Group recognised an impairment charge of €5.6 million during the period, primarily driven by the continued material growth in the commercial lending book and the increase in stage 1 assets. Notwithstanding these charges, asset‑quality indicators remained strong, supported by prudent underwriting standards and disciplined credit‑risk management.

Performance highlights

• Profit Before Tax amounted to €54 million, down from €67.1 million.
• Net Interest Income stood at €100.2 million, up from €92.5 million.
• Net Fee and Commission Income increased from €20 million to €20.2 million.
• Operating costs totalled €61.7 million, up from €52.8 million.
• Cost‑to‑income ratio increased to 51.8% from 44.7%.
• Return on Average Equity (pre-tax) decreased to 14.2% from 17.9%.
• Deposits increased by €351.9 million, surpassing the €14.1 billion mark.
• Total assets stood at €17 billion, up from €16.5 billion in December 2025.
• The credit portfolio reached €8.3 billion, up from €8 billion in December 2025.
• Net Asset Value per share stood at €2.4, up from €2.3 in December 2025.
• Capital ratios remained strong and above regulatory requirements.

The Group continues to monitor the evolving geopolitical environment and its potential impact on the Maltese economy and the financial system and maintains enhanced monitoring across key risk dimensions. The assessment remains that Malta entered the current period of heightened geopolitical uncertainty from a position of relative strength, supported by resilient economic growth, low unemployment, moderating inflation and sound public finances.

The Group’s risk management framework incorporates forward looking scenario analysis and early warning indicators to identify emerging stresses. To date, these have not signalled any material deterioration in customer behaviour or portfolio performance. This approach ensures that the Group remains well positioned to absorb potential shocks and continue supporting customers and the wider economy amid an increasingly uncertain global backdrop.

Commenting on the Group’s performance, Chairperson Dr Cordina stated, “The Group delivered a strong start to the year, reflecting resilience, a disciplined approach and solid fundamentals. This performance was achieved in a stable economic environment, alongside the expected normalisation of earnings, interest rate stability and a renewed period of geopolitical uncertainty.

From a market standpoint, the Share Buyback Programme continued to support trading activity in the Bank’s shares, while preparations are now underway for the issuance of a €300 million Senior Preferred Instrument, subject to regulatory approval. Supported by a strong capital base, resilient day‑to‑day performance and consistent execution of our strategy, the Bank’s share price rose to highs of €2.14 during the period.

Looking ahead, the Group remains well positioned to deliver a profit before tax for the year in the range of €210 million to €250 million, in line with previous guidance. We also remain committed to rewarding our shareholders and intend to maintain our policy of distributing up to 50% of after‑tax profits, subject to prevailing market conditions.”

CEO Kenneth Farrugia said, “I am pleased to report another strong performance by the BOV Group, building on the positive results delivered in 2025. During the first quarter of 2026, the Group sustained resilient operating performance, continued to grow its balance sheet and maintained sound asset quality, sustained lending and treasury activities, supported by a diversified business model.

The depth of our deposit base reflects the confidence our customers place in our credibility and long‑term approach. The growth and diversification of our corporate loan book support key commercial economic sectors, while the consolidation of our corporate services under one roof and the broadening of our service offer through non‑life insurance further strengthen our position as the Bank of Choice in Malta.

These results reflect strong fundamentals and continued customer trust. With the largest network of customer touchpoints in Malta, and a resilience underpinned by strong investment‑grade credit ratings, the Group is uniquely positioned to deliver stability and consistency while remaining deeply embedded in Malta’s economy. As we enter the final year of our strategic cycle, our focus remains on disciplined execution, responsible banking and the creation of long‑term value for all our stakeholders.”

Financial performance

Net Interest Income for Q1 amounted to €100.2 million, an increase of €7.7 million when compared to 2025. Growth was recorded in both loans and advances to customers underscoring the relevance of BOV’s products within the lending sector and equally important income from disciplined treasury management. Net Fee and Commission Income is reported at €20.2 million, a marginal increase of 1.1% from the same quarter last year, reflecting resilient customer activity with continued strength in cards and credit-related fees, consistent with ongoing shifts towards digital payment solutions.

Operating costs at end March 2026 totalled €61.7 million, an increase of €8.9 million over Q1 2025. This reflects higher personnel and IT costs, depreciation charges and contributions to the Depositor Compensation Scheme. As a result, the cost‑to‑income ratio increased from 44.7% in 2025 to 51.8%, consistent with the expected low‑to‑mid‑50% range outlined in the forward guidance.

The return on average equity (pre-tax) declined to 14.2%, down by 3.7 percentage points compared to 2025, consistent with the expected range communicated earlier this year and very much influenced by the one off profitability movements and the increased equity base. Earnings Per Share decreased to €0.056 compared to €0.069 for 2025 (restated for bonus issue in Q2 2025), reflecting the lower profit before tax for the quarter and the ongoing share buyback programme that partially mitigated the decline.

Asset quality indicators remain strong, with the NPL ratio improving to 1.57%, while ECL coverage ratio for credit-impaired assets stood at 55.1%, reflecting a sensible provisioning stance while continuing to benefit from improving portfolio quality and dynamics.

Financial position

Total assets stood at €17 billion in March 2026, up by approximately half a billion when compared with 2025. This represents a new high for the Group, with growth reflecting sustained balance-sheet expansion, consistent with the strategic focus on supporting domestic economic activity while maintaining strong liquidity and funding discipline. The Treasury portfolio has now reached €7 billion in Q1 2026, an increase of €119.3 million, reflecting the Group’s deployment of excess liquidity into high-quality debt securities.

The credit portfolio continued to grow, with the balance reaching €8.3 billion in the first quarter, reflecting strong momentum in customer lending. As a result, the gross loan-to-deposits ratio increased from 59% in December 2025 to 59.5% during the quarter. Deposits experienced another significant increase of €351.9 million or 2.6% during the first quarter of 2026, surpassing the €14.1 billion mark, reflecting the strength of the Group’s retail franchise driven by an increase in both retail and business deposits. As a result, the Group maintained very strong liquidity position, with the LCR ratio of 385.8% well above the minimum regulatory requirements.

The Group’s total equity closed at €1.5 billion, marginally higher from December 2025 with the Net Asset Value per share standing at €2.4 per share (December 2025: €2.3 per share), further strengthening the underlying book value position. The Group’s capital ratios remained strong and comfortably above regulatory requirements.

The post BOV reports profit before tax of €54 million for first quarter 2026 first appeared on The Malta Business Weekly.

The Bank of Valletta Group delivered a solid performance in 2025, generating a Profit Before Tax of €260.4 million and achieving a pre‑tax Return on Average Equity of 17.9%. This outcome reflects the strength of the Group’s underlying business model, the resilience of its core income streams, and the disciplined execution of its strategic priorities throughout the year. The Group continued to improve its balance sheet, enhance asset quality, diversify revenues and invest in its operational and digital capabilities. As a result, it enters 2026 with stronger financial foundations and clear momentum for the next phase of its strategic development.

The strong financial performance enabled the Board to propose one of the most substantial dividend distributions in recent years, with a final gross cash dividend of €65.1 million (€42.3 million net) being recommended for approval from H2 profits, equivalent to €0.1014 per share gross (€0.0659 net). Over and above, the Board also proposed a special dividend of €10.4 million gross (€6.8 million net), equivalent to €0.0162 per share gross (€0.0105 net). This special distribution reflects the portion of profitability generated during the financial year that exceeded the upper bound of the Bank’s forward‑looking PBT guidance which amounted to €250 million.

This results in a total cash dividend for FY25 (including interim payment and special dividend) of €0.2032 gross (€0.1320 net) per share, and equivalent to a total gross dividend of €130.5 million (€84.8 million net) out of the year’s profits, with the payout being fully aligned with the Group’s Shareholder Distribution Policy. The distribution underscores the Board’s commitment to delivering sustainable shareholder returns while preserving the capital strength and strategic flexibility needed to support future growth.

Complementing this cash dividend, the Bank has also allocated a €7.8 million reserve during the year to operate the regulated share buyback programme, activated during FY2025. This contributed to improved equity liquidity and more efficient capital management, showing the ever-increasing trust that markets, shareholders and the wider community have in BOV.

During the year, the Group strengthening its long‑term funding through targeted capital‑markets activity, completing the issuance of €150 million in unsecured Tier 2 bonds, concluding the €250 million EMTN programme launched in prior year. The Bank subsequently obtained regulatory approval for a new €325 million programme, under which €125 million in unsecured subordinated (Tier 2) bonds were issued, further enhancing the capital structure and supporting future growth. In parallel, the Group has commenced engagement with international markets in preparation for a €300 million Senior Preferred issuance, aimed at broadening and diversifying its wholesale funding sources while ensuring continued alignment with evolving MREL and strategic funding requirements. Further details will be issued during FY2026, with the issuance being subject to regulatory approval.

Financial Performance and Prevailing Economic Conditions

Despite normalising interest rates and sector-wide cost pressures, the Group delivered a solid financial performance, exceeding profitability targets and forward-looking expectations. While profitability declined when compared to FY2024, core operating performance remained resilient, with operating income increasing by 2.3% year-on-year, supported by disciplined balance sheet management, credit portfolio expansion, non-funded income diversification, and active cost and impairment management.

The Group further strengthened its balance sheet, with total assets increasing by €1.4 billion, with year-end figures exceeding €16.5 billion. Expansion was driven by sustained growth in customer deposits, which increased by €937 million, together with a €277 million rise in long-term liabilities following the successful issuance of Tier 2 subordinated debt, supporting strong loan book performance and expansion of the investment portfolio beyond targets.

One of the most substantial dividend distributions in years – Dr Gordon Cordina, Chairperson

Speaking during the announcement of the Group Financial Results, Chairperson Dr Gordon Cordina, said that “The Bank delivered strong profits notwithstanding the significant geopolitical tensions abroad, the normalisation of interest rates, and upward pressures on operating expenses. This highlights the resilience of our business model, the prudence of our strategic decisions, and our commitment to sustainable performance and effective risk management. The Group’s performance for 2025, which exceeded the initial profit guidance, enabled us to declare one of the most substantial dividend distributions in recent years.”

Dr Cordina continued by stating that, “As the country’s largest bank, developments within the Maltese economy directly influence our performance, just as our actions have a significant impact on households and businesses. Against this backdrop, throughout 2026, we will shape our next three-year strategy, remaining mindful of the risks, opportunities, and responsibilities we carry as Malta’s leading financial services institution.” 

Enhancing Customer Value, Accessibility, and Market Leadership – Kenneth Farrugia, CEO

CEO, Kenneth Farrugia, said that “During 2025, the BOV Group strengthened its leadership position across key customer segments, supported by targeted product innovation and improved customer experience. In retail business, home and personal lending, the Bank achieved double-digit growth. We strengthened our advisory capabilities, upgraded and modernised branches, opened a new Investment Centre in Sliema and upgraded two thirds of our ATM network. Our commercial banking performance also remained strong, with the relocation of our commercial operations to the Quad Central and a new Business Branch marking a strategic upgrade in service delivery. This reinforces our position as the Bank of Choice for both personal and commercial banking needs in Malta.”

Financial Performance

Operating income increased by 2.3% year-on-year, reflecting momentum across core business lines, optimisation of the funding and investment mix, and progress in revenue diversification. Commercial, Retail and Treasury remained the main pillars of income generation, delivering stable and recurring revenues.

Net Interest Income remained central to operating performance, increasing to €387.4 million as the Bank mitigates interest‑rate volatility through focused balance sheet optimisation and strong loan and investment activity. Net Fee and Commission Income also strengthened, rising by 8.2% to €88.1 million, driven by higher customer activity and the shift towards a more diversified, fee‑based earnings model.

Operating costs increased by 13.9% to €246.8 million over the prior year, reflecting a multi‑year investment programme aimed at strengthening technology, risk‑management and customer‑facing channels. Higher technology and cybersecurity expenditure mirrors accelerated digital implementation, transformation and resilience initiatives. Despite this, operating efficiency remains solid, with the cost‑to‑income ratio standing at 49.7% (FY2024: 44.6%).

The Non‑Performing Exposures ratio declined to 1.68%, supported by active remediation, improved portfolio monitoring and continued reduction of legacy positions. The coverage ratio increased to 59.4%, reflecting a resilient provisioning and approach to asset‑quality.

The Group’s profitability translated into a pre‑tax Return on Average Equity of 17.9%, comfortably above the 15% guidance. The year‑on‑year movement reflects both lower overall earnings when compared to the exceptional 2024 base and a higher average equity position driven by retained profits.

Profits from insurance associates increased to €10.4 million, reflecting the solid performance of the Group’s insurance operations in partnership with MAPFRE and their continued contribution to diversified earnings.

ESG remained a core priority, with progress on the Climate Transition Plan and further reductions in Scope 1 and Scope 2 emissions.

Outlook and Risk Management

The Group continues to monitor economic and geopolitical developments through risk monitoring frameworks, with assessments indicating no material emerging risks. Stress‑testing under ICAAP confirms strong capital buffers and resilience, while the Group remains vigilant towards maintaining transparent market disclosure.

The Board remains confident in the Group’s strategic direction, having delivered another year of strong performance underpinned by solid fundamentals, disciplined risk management and investment. Entering FY2026 from a position of strength, the Group remains focused on delivering sustainable growth, shareholder value and continued support for the Maltese economy.

The post BOV closes financial year 2025 with €260.4m profit before tax first appeared on The Malta Business Weekly.

Since its establishment in 2017, the Malta Development Bank (MDB) has supported around 750 firms, more than 90% of which are small and medium-sized enterprises (SMEs), CEO Alison Micallef said in an interview with this media house.

Micallef stressed that the MDB’s role is to intervene where “market failures” exist – in other words, where viable projects struggle to secure financing through commercial banks because of factors such as insufficient collateral, conservative lending appetites, or the long-term nature of the investment.

This focus on SMEs reflects their central role in Malta’s economy. Citing NSO data, Micallef said that 99.6% of all non-financial corporations in Malta are SMEs. Yet despite their dominance in numbers, they generate less than half of the country’s total net turnover.

“While SMEs are the backbone of the economy in terms of numbers and activity, revenue remains concentrated among a relatively small number of large enterprises,” she said, adding that SMEs therefore need greater support.

The MDB works alongside commercial banks rather than replacing them, stepping in through risk-sharing arrangements to make projects more bankable. “We do not want to displace private lenders,” Micallef said. “We want to work alongside them and help them make a project.”

As a development bank, the MDB is barred from financing speculative construction and real estate. Instead, it focuses on projects that create long-term economic and social value, particularly in areas such as productivity, innovation, energy resilience, and infrastructure.

One flagship example is the StudentAssist scheme, which helps students finance higher education in Malta or abroad. Around 900 students have benefited so far, with total support reaching approximately €38 million. Under the scheme, students can access interest-free loans of up to €100,000 to cover tuition, accommodation, and related expenses through partner banks BOV and APS.

Micallef said the scheme is an investment in Malta’s future workforce. “By removing financial barriers, we are helping to develop a skilled workforce in Malta that will materialise in the future,” she said.

MDB-backed projects typically involve long repayment periods and are monitored continuously, with formal annual reviews carried out jointly with partner banks. This allows the bank to track growth, market traction, and the overall impact of the financing.

The MDB’s importance was especially visible during the Covid-19 pandemic, when it estimates that its support helped safeguard around 40,000 jobs. According to Micallef, the bank’s contribution during that period amounted to 13% of Malta’s gross value added, or around €1.7 billion.

The bank has also recently strengthened its position internationally. In early 2026, it became the smallest bank in Europe to pass the European Commission’s pillar assessment, allowing it to access the InvestEU budget directly. This means the MDB can now help Maltese businesses tap into EU-backed guarantees without relying solely on intermediaries.

Looking ahead, Micallef said the MDB is concentrating on sectors critical to Malta’s long-term competitiveness, particularly innovation and energy resilience. She noted that these are precisely the areas where private markets can be more reluctant to take risks, especially during periods of uncertainty.

On innovation, the MDB is working with Xjenza Malta on a blended finance instrument to help businesses commercialise research and development. Rather than relying solely on grants, the new tool will provide longer-term loan financing to help ideas reach the market.

Infrastructure is another core pillar. The MDB focuses on sustainable, bankable projects that address clear market gaps, particularly those with long repayment periods that may exceed local banks’ risk appetite. As Malta’s only implementing partner for the Alternative Fuels Infrastructure Facility (AFIF), the MDB can also help entrepreneurs secure cheaper financing for eligible projects, provided they meet strict EU environmental and technical standards.

Despite its policy alignment with Malta Vision 2050 and EU green and digital priorities, Micallef insisted that “policy alignment never comes at the expense of financial discipline.”

“Our decisions are banking decisions, not political decisions,” she said.

This is an abridged version of an interview which was carried in The Malta Independent on Sunday on 22 March

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The proportion of counterfeit euro banknotes remains insignificant when compared to the 30.22 million genuine euro banknotes in circulation in Malta in 2025.

Among the 1,097 counterfeit euro banknotes seized in Malta during 2025, the middle denominations continued to be the most counterfeited. Nevertheless, the €20 denomination lost in importance, while the share of the €50 denomination increased. Together, these two denominations accounted for 87.5% of all seized counterfeits. The share of the lower denominations (€5 and €10) also decreased, while the percentage of the highest denominations remained very low.

The table below provides a percentage breakdown by denomination of the total number of counterfeits withdrawn from circulation in Malta during 2025, compared with the distribution by denomination across the entire euro area. It must be noted that while the €20 denomination predominates in Malta, the €50 is the most frequently detected counterfeit banknote in the euro area.

Notwithstanding the low figures of counterfeits reported locally, the Central Bank of Malta continues to advise the public to remain alert with regards to banknotes received in cash transactions. Most counterfeits are easy to detect as they have no security features, or only poor imitations of such features.

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The commencement of this series of announcements reflects improvements in the technical and governance systems and structures being used by the Bank for the determination of base rates. It also highlights the Bank’s continued commitment to improve and strengthen its communications with the financial markets, and to meet and exceed regulatory expectations.

The Bank Base Rates operate as a core component within the Bank’s enterprise‑wide pricing framework. It works in tandem with product‑specific parameters (such as risk‑based add‑ons, customer‑level adjustments, and contractual terms) to deliver pricing outcomes that are fair, transparent, and consistent with the principles laid out in the Bank’s internal pricing governance.

By anchoring lending rates to an internally governed benchmark, the Bank promotes coherence between individual credit decisions and broader balance sheet objectives, including profitability, capital efficiency, and portfolio risk appetite. These internal benchmark rates are subject to a structured governance and review process every quarter, the bank said.

In determining the Base Rate levels for the forthcoming period, the Bank undertook a comprehensive assessment grounded in its formal Base Rate Policy. This framework requires that every decision, whether to maintain or amend the rates, be evaluated holistically across key principles that safeguard financial resilience, prudent balance sheet management, and fair outcomes for customers.

Following this scheduled review of interest rate trends and prevailing market conditions, the Bank’s Base Rates applicable to its Credit Portfolio will remain unchanged for the forthcoming three‑month period up to end June 2026. Effectively, the Business Bank Base Rate remains at 2.15% per annum, the Home Loans Bank Base Rate remains at 2.15% per annum and the Personal Loans Bank Base Rate remains at 2.45% per annum.

The decision to retain the Base Rates for its credit portfolio unchanged for the forthcoming three‑month period is underpinned by internal financial projections which continue to indicate consistency with its strategic, budget and risk appetite, Key Performance Indicators and Key Risk Indicators. The capital and liquidity positions of the Bank remain strong without any indications of stresses.

Current geopolitical tensions abroad, the outlook for the economy, the Bank’s competitiveness in the market, and the safeguarding of the interests of the Bank’s clients also vouch for the need for continued stability in interest rates in Malta and in the Bank’s base rates in particular. The Bank also noted that, over recent years, it was able to maintain the Base Rates at stable levels notwithstanding changes in market conditions, including shifts in the European Central Bank’s monetary policy stance.

These rates will remain in effect, at least, until the next review scheduled for June 2026, the bank said.

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The Group delivered a pre-tax profit of €26.5 million (2024: €23.8 million), with the Bank posting €26.9 million pre-tax (2024: €22.5 million), driven by higher revenues and transaction volumes, and reduced cost of funding. Net interest income rose by 20% to €78.7 million, supported by increased credit and treasury activity, improved yields, and a strategic shift from fixed-term to overnight deposits that lead to wider net interest margins.

Operating income rose by 8% to €89.3 million, while net impairment losses dropped to €0.7 million, reflecting strong asset quality and disciplined underwriting with the NPL ratio closing the year at an all-time low of 1.4%. Operating costs increased due to continued investment in human resources, multiple technology projects, advisory overheads and regulatory costs, with the cost-to-income ratio closing at 70.7%.

The Bank’s financial position also strengthened, with total assets and customer deposits now exceeding €4.6 billion and €4.1 billion, respectively. Total equity increased to €355 million, boosted by the successful 2025 Rights Issue and retained earnings. Capital ratios improved markedly, with the CET1 ratio of 17.6% and Capital Adequacy Ratio of 23.2%. The Board is declaring a final net dividend of €7.4 million, bringing the total net dividend for the financial year to a highest ever distribution of €9.2 million.

APS Bank CEO Marcel Cassar commented: “We are proud to announce a standout performance marked by double‑digit growth over 2024 and a strong rebound in banking income in 4Q2025 – one of our best quarters on record for both operating and profit results. We strengthened margins, expanded retail and commercial lending, and increased revenues across every business line. Last year we promised an uplift in profitability, we are now delivering that consistently and aim for more – despite a volatile geopolitical and economic environment. With strong liquidity, capital and asset quality, we are exceptionally well positioned for the next phase of growth and confident in delivering even higher returns for our shareholders.”

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