BoV to launch bond issue in second quarter

Bank of Valletta is planning to launch a bond issue in the second quarter of the year to coincide with the redemption of the current subordinated bond issue due on March 15, the bank said on Friday.

In an interim directors statement on the Malta Stock Exchange, Bank of Valletta said that the decision fell under its previously announced intention to make longer term bond issues a more regular feature of its funding policy. The new issue would provide existing investors with an opportunity to reinvest the redemption proceeds.

Bank of Valletta said its operating profits for the first quarter of the financial year were satisfactory, but, as anticipated, the current difficult economic environment has been reflected in an increased impairment charge.

Overall credit quality "remains sound", the bank said.

It did however warn about the impact of the performance of Middlesea Insurance.

"It is apparent from the prospectus issued by Middlesea Insurance plc and the subsequent company announcement, that the financial performance of our associated company investment will once again involve a negative charge on the consolidated income statement of Bank of Valletta Group for the current financial year."

The bank said that, during its first quarter, it had enjoyed a sustained an encouraging growth in customers' deposits. Its deliberately prudent funding, asset quality, liquidity and capital ratio policies had also been maintained.