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BOV Chairman Joseph F X Zahra Friday announced that the Bank of Valletta Group has registered a strong Lm8 million profit before tax for the six-month period ended on 31 March 2004.
BOV’s Board of Directors, meeting Friday, approved the Bank’s Half Yearly Report for the period October 2003 to March 2004 and an interim dividend of 6c per share, gross of tax.
Commenting on the positive results, Zahra stated, "These positive results are a reflection of the strategic direction that BOV is following. They reflect a strengthening of the Group’s sound fundamentals with operating income increasing at a faster rate than costs.”
Focussing on the financial results, Zahra explained that during the first half of the current financial year, BOV registered a strong increase in net advances which now stand at Lm814.9 million, an increase of Lm33.9 million, or 8.6 per cent p.a. Concurrently, customer deposits remained stable at Lm1.43 billion. Shareholders’ funds amount to Lm128.8 million, an increase of Lm1.8 million or an annualised growth of 2.8 per cent.
The results continue to reflect and reinforce the sound fundamentals of the group and profit before tax rose by 25.1 per cent when compared to the corresponding profit figure of Lm6.4 million registered for the same period last year. Return on equity rose from 11.3 per cent in March 2003 to 12.6 per cent.
The BOV Group’s strategy to focus on both income generation and cost containment yielded the desired results and the core sources of income increased while, concurrently, growth in overheads was contained. Operating income increased by 11.0 per cent, from Lm24.4million in March 2003 to Lm27.1 million. The Group performed well both in terms of interest income, which increased by Lm1.9 million to Lm 18.4 million (11.7 per cent ) as well as in non-interest income . The latter increased by Lm0.8 million to Lm 8.7 million (9.7 per cent). Profits from associates amounted to Lm1.1million in March 2004, compared to Lm0.8 million for the same period last year.
This strong operating performance, coupled with the fact that operating expenses remained at last year’s level, has contributed to a strengthening of the cost income ratio which now stands at 52.2 per cent (March 2003: 57.8 per cent).
The last tranche of provisioning required to bring the Group in full compliance with the relative Banking Directive, resulted in a charge for impairment allowances of Lm6.0 million, up from Lm4.7 million for March 2003. This amount represents the proportionate charge for the first six months of the current financial year.
Commenting on the operations of the Group during the first half of the financial year, Mr Zahra said, “During the first six months of this financial year, the Group has continued to invest in its people, processes and technology with a view to providing value added services to its customers. Our efforts have received international recognition. Indeed, the Institute of Financial Services of the UK presented BOV with the prestigious financial innovation award for the best Customer Relationship Management strategy.
BOV also continued to register successes in the investment-banking field. BOV was honoured to act as manager and registrar of the European Investment Bank’s (EIB) first bond issue in Maltese Liri, an operation that was concluded successfully with the bond issue being oversubscribed.
The six-month period ended 31 March 2004 was characterised by significant developments in a number of strategic areas of operations. BOV continued to focus on its euro-med internationalisation strategy through the opening of a new representative office in Cairo, Egypt. It continued to consolidate its position as the leading provider of technology based services increasing the services available through the BOV Internet Banking service and the other 24x7 services. These highly secure and easy to use services continued to be extremely popular with customers who have effected millions of transactions using these alternative delivery channels., New financing options tailor-made to meet the needs of SMEs were also introduced, reflecting BOV’s customer centric orientation. In terms of the physical infrastructure, construction works on the new Operations Centre in Sta. Venera have now been completed and this project has entered into its final phase,” said Mr Zahra.
The Chairman concluded by commenting that it gives him great satisfaction to be able to announce such positive results on the day that Malta is formally joining the European Union. “We are very excited that Malta is now a member of the EU and we are confident that new frontiers and new opportunities will now open up outside the Maltese geographical space, not only for us, but also for our customers. The strong base of our operations places us in the ideal position to be able to take full advantage of these opportunities. We look to the future with confidence and expect to start seeing improvements in the local economy through an increase in foreign direct investment, increased efficiency and productivity resulting in a high standard of living and increased purchasing power and sale opportunities.”
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