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By a staff reporter
Bank of Valletta announced an operating profit of Lm24.3 million for the interim period ending in March this year representing an increase of Lm5.5 million over that reported for the previous year. This 29.2% was definitely good news for its shareholders as it shows that their investment achieved a 30% annualized returns.
If there is something that strikes you from BOV’s results are the double digit growth figures registered.
As a start, the Net interest income surpassed the Lm27million Malta lira mark, an increase of nearly 15%. As other income increase, the overall operating income reached Lm39.3 million showing a growth of 10% over that registered in interim 2006. BOV had a slight increase in administrative and depreciation expenses but the cost to income ratio is a low 39.3% making it one of the best performing bank with this Key Performing Indicator.
As a result of improved quality of the loan book and a reduction in non performing loans, the impairment losses have decreased drastically. This year, BOV’s share of profits from associated companies was less but overall the profit before tax of the BOV group is a record Lm24.3 million for the first interim. In their outlook comment, the Board of Directors sees no reason not to expect similar results in the second part of the financial year. There is the usual caveat of “other things being equal” and a marginal reduction may be reported.
The Total Assets have reached Lm2.4 billion with loans and advances to customers registering an increase of 11%. On the other hand the amounts deposited by customers increased slightly by 1.2%. These brought the advances to deposits ratio to reach 0.65 times.
The Board of Directors of Bank of Valletta has announced a Gross interim dividend of 6cents75 which is a 23% increase than that announced for the interim dividend in the previous year. However, the Payout ratio is less than 30% which is low compared to other locally listed Banks that have a more aggressive dividend policy which excite their shareholders with.
On the basis that the Group’s Bank balances continue to increase despite regular payments of dividends, as well as profits and the fact that impairments are lower, shareholders would want to feel the wealth of their investment in a higher dividend. |
