Bank of Valletta has reported a pre-tax profit of €63.7m for the first three months of this year, a year-on-year increase of 36.8%.
Last week HSBC Bank Malta reported a pre-tax profit of €39.3m for the same period.
BOV said its positive performance was influenced by an improvement in operating income, reflecting a growth of 22.9% to €117.4 million when compared with the same period in 2023. This was driven by increased returns both from an interest and non-interest income perspective.
Net Interest Income stood at €98.3 million, an increase of €24.8 million when compared with the first quarter of 2023. This reflected expansion in both the customer lending and proprietary investment portfolios over the last 12 months, as well as improved rates on cash balances.
Net fee and commission income was up by 11%, mainly influenced by higher amounts being achieved on credit-related business.
Operating costs including strategy amounted to €49.1 million, equivalent to a 6.8% increase on previous year results.
The bank said the Cost to Income Ratio continued trending downwards, standing at 41.8% in the first quarter. These developments were reflected in a 20.4% pre-tax Return on Average Equity, which was a 4.4% improvement over that recorded in the first quarter of 2023.
"With a gross loan-to-deposit ratio of 53.4% and strong sanctioning levels of business and retail loans, the Group is well positioned for further growth and to deliver its 2024 targets. The €47 million reduction in the deposit base equivalent to a 0.4% drop on FY23 end results aligns with expectations; nevertheless, the Group retained high levels of liquidity," BOV said.
Speaking during the announcement, BOV Chairman Gordon Cordina said the results were extremely encouraging and testament to the bank’s ongoing efforts to grow its core business.
He observed that while the European Central Bank (ECB) had maintained the rate on its deposit facility at 4% since September 2023, it may start reducing the current level of monetary policy restriction sometime in 2024. In preparation of a falling interest rate scenario, the bank has been proactively restructuring its balance sheet, through the redeployment of treasury funds into longer-term assets, and a productive expansion in good-quality credit. The bank’s exposure to cyclical fluctuations in rates has thus been reduced and this should generate a more stable positive performance over time.
"We also believe that Malta’s current and near-term economic environment has remained benign, supporting our positive expectations vis-à-vis further growth in our loans, and the preservation of asset quality over the coming months,” he said.