Bank of Valletta will start clearing US dollar transactions through Western Union Business Solutions, the bank confirmed in a company announcement on Thursday. 

The bank has been struggling to find a long-term solution after Deutsche Bank, ING and Raiffeisen Bank terminated their relationship with Malta or stopped offering US dollars transactions to BOV. 

In the announcement, BOV said it is already receiving payments through Western Union Business Solutions from two major US dollar clearers. 

The bank said the full transition from Raiffeisen Bank International to Western Union Business Solutions is planned for the week starting May 10. 

In a separate announcement, the bank said it had made a pre-tax profit of €9.3 million in the first quarter of this year. 

The bank said this was in line with underlying performance trends experienced over the course of last year, conditioned by subdued activity and provisioning occasioned by the COVID-19 environment.

Critically-dependent on COVID recovery

BOV said this figure was impacted by a number of factors which may not be present throughout the rest of the year. 

It said the bank’s performance this year is “critically dependent” on the speed of the recovery from the COVID-19 pandemic. 

The bank explained the performance during the first quarter of this year continued to reflect impairment charges for long outstanding non-performing loans which were extended, and focussed action is being taken to address this portfolio.

BOV said the group had shifted the emphasis of its investment spend towards the transformation and growth of its business, as de-risking projects are phasing into a "business-as-usual" situation.

Revenue decreased by four per cent over the comparable period of 2020, mainly due to the effect of a refund of customer fees and charges which had been introduced late last year, BOV said. 

The introduction of fees for dormant accounts was met with uproar last year, leading the bank to reverse the fees it had already charged. 

BOV’s revenues were also impacted by reduced foreign exchange business on account of COVID-19 restrictions.

Operating costs were higher by four per cent as compared to the first quarter of 2020. 

The bank said this was mostly driven by an increase in employee compensation as well as investment in technology and related amortisation.

Compared to December 2020, net loans and advances to customers increased by 1.7 per cent. 

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