BoV board recommends 11c gross dividend
payment per share
of Lm14.4m down by Lm3.2m over 2000
According to a preliminary statement, the BoV Group registered a pre-tax
profit of Lm14.4 million for the financial year ended 30 September.
However, the profit figure represents a reduction of Lm3.2 million over
the profit registered last year, which had included a particularly strong
contribution from its insurance and fund management businesses which
did not repeat itself to the same extent this year.
Despite this, the Group states that business fundamentals remain strong
as evidenced by the resilience of core income in the context of stronger
competition and less favourable market conditions.
During the financial year shareholders funds increased by Lm7.6
million, or 7.9%, and amounted to Lm103.5 million. Group Net Asset Value
per share is Lm2.24 (September 2000: Lm2.08).
Given the strong business fundamentals of the Group, the Board of Directors
has recommended an increased gross dividend payment of 11 cents per
share, up 2 cents from the dividend paid last year.
Group Total Assets continued to increase by Lm163.6 million, or 10.4%
and currently stand at Lm1.74 billion. Customer deposits increased by
Lm117.0 million, or 10.4%, over September 2000 and today amount to Lm1.25
billion - representing 71.4% of Group Total Assets. Meanwhile, advances
to customers, net of provisions, stand at Lm722.7 million, representing
an increase for the year of Lm35.7 million, or 5.2%
Commenting on the results Group Chairman Joseph F. X. Zahra, highlighted
a number of interesting trends observed from the results. He explains,
"First of all, the performance of the BoV Group during the second
semester of this financial year was better than that registered during
the first six months, contributing to stronger overall results. This
has been an encouraging year during which we have increased our interest
income, despite strong competition in the market, thus consolidating
our core business.
"We have also managed to contain costs in line with our declared
objective to place cost-effectiveness at the basis of all business decisions.
Costs are today well under control and have only increased by 5.7% this
year compared with an increase of 20.6% the previous year".
Mr Zahra went on to say that the BoV Group results also have to be assessed
in the light of various constraints under which the organisation operated
during the financial year just ended. "The BoV Group has scored
well in terms of profitability despite that this year did not see a
repeat of the material gains realised last year from associated companies.
The volatility of international markets also resulted in lower price
gains on the Banks investment portfolio. Commission income from
the sale of collective investment schemes was also lower and this is
a reflection of the situation prevailing during this year on the stock
exchange market," said Mr Zahra. The Chairman also said that the
Bank has continued on its declared policy of prudent provisioning, both
in line with international standards and also in accordance with the
recently introduced CBM directive on provisioning., The Group has, accordingly,
increased provisions for bad and doubtful debts to Lm34.9 million which
represents 4.6% of the Banks loan portfolio.
The Chairman commented that these results reflect the dynamism BOV has
shown in its operations during the year just ended. "We have shown
that we can live up to our reputation of being a proactive and innovative
Bank through the launch of a number of new products on the local market.
Spurred by the changes in legislation which permitted banks and other
financial institutions to offer stockbroking services, BoV Group established
BoV Stockbrokers Ltd. (BOVSL) as its new stockbroking arm and started
to offer stockbroking services from the Bank's wide network of branches
in Malta and Gozo. Bank of Valletta has also continued to innovate in
the field of Information Technology, and was the first bank to introduce,
this year, video conferencing facilities to offer customer service at
a number of branches. The Bank signed an agreement with Brokat Technologies
AG, a leading European provider of software solutions and services for
the financial industry, so as to be in a position to offer multi-functional
applications to its customers". Mr. Zahra also mentioned as significant
the Euro 100 million syndicated loan raised by the Bank this year which
was the largest of its type raised by a Maltese Bank to date.
Mr Zahra concluded by saying that during this financial year the Bank
has given a new impetus to its internationalisation programme when,
in October 2000, it inaugurated an overseas representative office in
Tunisia. This new venture is considered to be the first step in the
Banks efforts to position itself distinctly by tapping the potential
of the Southern Mediterranean region. He said that it is planned that
this direction be further consolidated during the coming year with the
opening of another representative office in Libya.