Bank of Valletta said that the first quarter of 2026 represented a solid start to the financial year for the Group, characterised by continued balance-sheet growth, resilient core operating income and disciplined execution of its strategy.

For the first quarter of 2026, the Group announced a Profit Before Tax of €54 million, representing a decrease of 19.5% over the same period in 2025.

During the period, the Group said it delivered a ”resilient core operating performance, supported by strong capital and liquidity positions. Solid business activity sustained core income, with net interest income benefiting from continued lending growth and disciplined treasury management, underpinned by a stable, high-quality funding base. Net Fee and Commission Income remained stable, reflecting strong customer activity and reinforcing the Group’s income diversification strategy.”

It was explained that the bottom line profitability was shaped by specific, non-recurring factors, including heightened geopolitical tensions that led to increased financial-market volatility. While not impacting the Group’s core operating activities, customer behaviour or portfolio performance, this resulted in an unrealised valuation impact on the equity investment portfolio. ”Consequently, a net trading loss of €3.6 million was recorded when compared with a gain of €5.5 million in 2025. This was not material and did not affect the Group’s capital strength or liquidity position, BOV said.

The Group said that ”profitability was also influenced by higher impairment charges, reflecting specific and identifiable credit developments rather than a deterioration in the broader credit environment. The Group recognised an impairment charge of €5.6 million during the period, primarily driven by the continued material growth in the commercial lending book and the increase in stage 1 assets. Notwithstanding these charges, asset-quality indicators remained strong, supported by prudent underwriting standards and disciplined credit-risk management.”

Performance Highlights

Profit Before Tax amounted to €54 million, down from €67.1 million.

Net Interest Income stood at €100.2 million, up from €92.5 million.

Net Fee and Commission Income increased from €20 million to €20.2 million.

Operating costs totalled €61.7 million, up from €52.8 million.

Cost?to?income ratio increased to 51.8% from 44.7%.

Return on Average Equity (pre-tax) decreased to 14.2% from 17.9%.

Deposits increased by €351.9 million, surpassing the €14.1 billion mark.

Total assets stood at €17 billion, up from €16.5 billion in December 2025.

The credit portfolio reached €8.3 billion, up from €8 billion in December 2025.

Net Asset Value per share stood at €2.4, up from €2.3 in December 2025.

Capital ratios remained strong and above regulatory requirements.

Commenting on the Group’s performance, Chairperson Dr Cordina stated, “the Group delivered a strong start to the year, reflecting resilience, a disciplined approach and solid fundamentals. This performance was achieved in a stable economic environment, alongside the expected normalisation of earnings, interest rate stability and a renewed period of geopolitical uncertainty.

”From a market standpoint, the Share Buyback Programme continued to support trading activity in the Bank’s shares, while preparations are now underway for the issuance of a €300 million Senior Preferred Instrument, subject to regulatory approval. Supported by a strong capital base, resilient day-to-day performance and consistent execution of our strategy, the Bank’s share price rose to highs of €2.14 during the period.

”Looking ahead, the Group remains well positioned to deliver a profit before tax for the year in the range of €210 million to €250 million, in line with previous guidance. We also remain committed to rewarding our shareholders and intend to maintain our policy of distributing up to 50% of after-tax profits, subject to prevailing market conditions.”

Photo: BOV

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