The Bank of Valletta Group have announced the financial Statements for January-June 2024, describing it as “a strong financial performance, with pre-tax profits of €148.2 million, representing an increase of 40.9% over the same period last year.”

It was explained that the increase in profitability resulted from strong growth in interest income, and to a lesser extent, from net fee and commission streams, underpinned by sustained efforts to improve cost effectiveness and efficiency.

In tandem, the Bank said that it” continued to pursue a balance sheet optimisation strategy, shifting short-term liquidity into long-term assets to ensure longer term profitability.”

The Bank said it registered Net Interest Income (NII) of €193.6 million, representing an increase of 21.1% when compared with the same period last year. Net Fee and Commission Income increased by 6.5%, reaching €36.7 million, with positive results registered in core income areas including credit-related and trade finance business, as well as brokerage and other investment related activities.

Operating costs registered a decrease of €2.3 million, down to €90.7 million, with costs of human capital the primary driver, the Bank said, followed by technology-related expenses.

The Bank added that its efforts to manage its costs resulted in cost reductions in the majority of cost categories, with the Cost-to-Income ratio reducing sharply from 47.9% in June 2023 to 40.7% in June 2024.

The Group explained that its strategy to optimise the balance sheet continued to be centred on its core financing business and management of excess liquidity. “The Group’s treasury continued to perform well on the strength of increased volumes and improvements in the net interest margin on the investment portfolio, as well as interest being derived on the cash deposits held with the Central Bank.”

While cash and short-term funds decreased by €1.1 billion compared to end December 2023, investments in the treasury portfolio increased by €723.2 million.

Loans and advances to customers amounted to €6.6 billion at the end of the first half, resulting in a net increase of €374 million, with high growth levels on both business and retail advances. On the liabilities side, customer deposits experienced a marginal increase of €14.9 million, reaching €12.2 billion.

The Bank said that this led to a favourable increase in the Group’s gross loan-to-deposits ratio from 51.7% at end 2023 to 54.7% at end of June 2024, in line with the Bank’s long-term direction.

Following these developments, the Bank said it retained a “comfortable Liquidity Coverage Ratio of 357% as at 30 June 2024. With a continued focus on asset quality and related impairments, the non-performing exposure ratio moved below the 3% mark by June 2024.”

The Bank said that total Group Equity stood at €1.3 billion, an increase of €68.7 million, while the net asset value per share at the end of June 2024 stood at €2.3 per share (December 2023: €2.2 per share).

BOV Chairman Dr Gordon Cordina, CEO Kenneth Farrugia and CFO Kevin Cardona

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