Bank of Valletta registered a €76.6 million loss in the first six months of 2022, as the cost of the Deiulemar settlement bites.
The bank said that while it had made a pre-tax operating profit of €26.1 million, the settlement dragged it to a €76.6 million loss. The net loss post tax was €51.1 million.
“The board has decided that, notwithstanding the resolution of the Deiulemar litigation and the sustained commercial performance of the bank during the first half of 2022, no interim dividend is being declared,” the bank said in a statement.
In May, BOV reached a €182.5 million settlement over the long-drawn-out Deiulemar bankruptcy case in Italy.
Shareholders of the collapsed shipping giant were found guilty of fraud and seven members of the company's founders were jailed by an Italian court in 2014.
BOV had taken over a trust that held €363 million in the company's assets in 2009. When the company went bankrupt, bondholders whose savings were wiped out turned to BOV.
On announcing the interim results on Thursday, BOV chairman Gordon Cordina said they are a clear indication that the ground was being set for a bright future for BOV.
He said that the bank’s mid-year performance, albeit impacted by the out-of-court settlement of the Deiulemar case, remained strong.
Cordina said Malta’s removal from the FATF grey list had eliminated the risk of a long-term impact on the bank, which could eventually have impacted BOV’s performance and its ability to service clients effectively.
Evaluation of interest rates scenario
On the ECB’s progressive raising of interest rates, Cordina said the bank will be evaluating how financial and liquidity conditions evolved internationally and in Malta, to consider the appropriate interest rates on the loans and deposits offered to its clients.
Outgoing BOV CEO Rick Hunkin said the bank’s main income lines continued to show steady growth, despite the negative interest rate impact.
“Offsetting this, we continue to face rising costs driven in particular by rising staff costs and the increasing contributions we have to make to the deposit compensation scheme, which grew in line with our significant deposit growth,” he said.