Bank of Valletta has announced the BOV Group financial performance for the six months ended June 2023, reporting a profit before tax of €105.1 million, compared to a pre-tax loss of €72.1 million (restated) during the first half of last year.

BOV Chairman Dr Gordon Cordina remarked that this is a “tangible sign that the outlook for BOV is bright.”

The details provided by the Bank on Thursday are as follows:

The Group’s 1H 2022 profit has been restated by €4.6 million in profits from associates, following the implementation of IFRS 17 by the Group’s associated companies.

Group Financial Performance Positive results in the first half of 2023 were led by a significant improvement in the Group’s Operating Revenues to reach €202.5 million, up by €71.2 million, (54%), over the first half of 2022.

Net Interest Income remains the leading driver with €159.9 million, an increase of €72.7 million (83%) on June 2022. BOV explained that this was due to the consistent growth in customer lending and investment securities portfolios coupled with further benefits from the upward repricing of interest rates.

Net Fee and Commissions, Exchange and other revenues stood at €42.7 million, down by €1.5 million (3.3%). Net commissions declined by €2.8 million, (7.4%), over the same period last year due to the removal of deposit-related fees and a persisting slowdown in investment-related commissions. An increase was registered in foreign exchange revenues.

Operating costs for the interim period amounted to €93.0 million, up by €5.3 million, (6.0%), compared to June 2022. The Bank said that this was primarily driven by higher employee compensation as the Group continues to invest in human capital, partly offset by lower contributions to the Depositor Compensation Scheme.

Group Financial Position Total assets for the Group stood at €14.3 billion as at mid-2023, lower by 1.4% compared to the year ended 2022 (2022 as restated: €14.5 billion).

The funding of the Bank remains dominated by customer deposits with close to 70% driven by the retail segment. Balances on customer deposits declined by 2.7% during 2023, resulting mainly from corporate customers.

The Bank said it is supporting its personal and corporate customers to manage their liquidity held in bank deposits, through opportunities in the capital markets. Group’s gross loans to deposits ratio stood at 49.2% up from 46.0% in December 2022, in line with the Bank’s strategy.

Net loans and advances to customers as at 30 June 2023 reached €5.8 billion (Dec 2022: €5.6 billion), a growth of 4.4% on December 2022. The higher increase was in corporate loans as the retail lending portfolio advanced at a slower rate.

Excess liquidity in cash and short-term assets dropped by €540.1 million to €2.85 billion by mid-year. Funds were utilised towards the growth in the customers‘ loan book and investments in treasury assets.

Speaking during the announcements, BOV Chairman Dr. Gordon Cordina stated that the positive performance registered during this period “reflects the activities of the Bank to optimise its performance within the opportunities created by the higher interest rate environment.”

BOV CEO Kenneth Farrugia stated that in the first half of 2023, the Bank continued to strengthen its position as a leading financial institution in Malta.

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