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NEWS | Tuesday, 31 October 2007

BOV registers another record Lm43.7 million profit for year ending 30 September

The Bank of Valletta Group (BOV) announced an operating profit of Lm43.7 million (€101.8 million) for the financial year ended 30 September 2007, an increase of 13.9 per cent over the profit registered in the last financial year.
These results represent a record year for BOV, and the Board has been able to recommend the payment of an increased dividend to the shareholders, together with a bonus share issue.
Addressing media representatives, licensed stockbrokers and financial intermediaries on Friday, BOV Chairman Roderick Chalmers announced that the Board of Directors was recommending a final gross dividend of 13.5c per share, which taken together with the gross interim dividend of 6.75c per share paid on May 30, makes for a total gross dividend of 20.25c per share for financial year 2007.
This represents an increase of 22.7 per cent on the total gross dividend of Lm0.1650 per share paid for FY 2006.
Chalmers also announced that the Board was recommending, effective 15 January 2008, an increase in the nominal and paid up value of the Ordinary shares in issue from 58.23c (which will, after euro conversion, be the equivalent of the current nominal and paid up value of 25c per share) to €0.75 per share. The increase will be funded by a capitalisation of reserves amounting to €18.582 million (Lm7.977 million).
Furthermore, and also effective 15 January 2008, the Board was recommending a bonus issue of 1 share for every 4.92581 shares held. The Bonus issue will be funded by a capitalisation of reserves amounting to €16.875 million (Lm7.245 million).
“These two moves will serve to further strengthen the balance sheet through the increase in the permanent paid up capital of the Bank to €100 million, and will also serve to enhance the affordability and liquidity of the Bank’s shares,” said Chalmers.
The progress made by the Bank’s Credit division as reported last year had been sustained through financial year 2007. “During the year we have seen a growth of 12.6 per cent in our loan book, with total loans and advances reaching Lm1,150 million, and a continuing improvement in the quality of that business. Growth has come from both the business and home loan (mortgage) sectors,” said Chalmers.
Concurrently, BOV continues to be the bank of first choice for the Maltese public in terms of Customer’s Deposits. “Total deposits have increased by Lm174 million from September 2006 to reach Lm 1,848 million as at the year end, and we have seen strong growth in retail demand for both Lm and foreign currency deposits.
“Malta’s ongoing development as an international financial centre is attracting strong money flows, but these tend to be more short term in nature, with significant periodic fluctuations taking place. Overall, FY 2007 has seen a further consolidation of BOV’s position as the market leader in the Customer Deposit sector”, said Chalmers.
The BOV Chairman announced that impaired lending as a percentage of the total book had decreased from 7.4 per cent at September 2006 to 4.8 per cent as at the year end, and further improvements are expected. “This improvement has resulted from a concentrated campaign to tackle our legacy of impaired lending, and safeguarding through credit risk management procedures the quality of the new business being taken on by the Bank,” he said.
During the financial year ended 30 September 2007, the Bank’s Credit Card business has continued to grow satisfactorily, and excellent performances have been registered by the Stockbroking, Bancassurance, Trade Finance, and Foreign Exchange businesses.
Valletta Fund Management has performed well in an extremely challenging market environment, and Valletta Fund Services has got off to a good start in its first year of operations. The newly launched Trustee business is building both reputation and momentum, and is expected to grow well.
Chalmers said that costs were kept under tight control, increasing by just 2 per cent year on year. Effective cost management is underlined by a cost to income ratio of 42.2 per cent for FY 2007.


31 October 2007
ISSUE NO. 509


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