7 NOVEMBER 2001

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BoV board recommends 11c gross dividend payment per share

BoV profits 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 Bank’s 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 Bank’s 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 Bank’s 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.

 



The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
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