Economic shocks from Iran conflict mirror past crises, BOV chair says
Malta has previously handled these shocks well, Gordon Cordina said
Economic threats posed by the war in Iran are similar to those Malta has experienced over the past few years, BOV chair Gordon Cordina said on Thursday.
Cordina was speaking at the presentation of the bank’s financial results for 2025, which revealed that the bank had registered a profit before tax of €260m throughout the year.
Cordina said that “there is strong interdependence” between the health of BOV, Malta’s largest bank, and the Maltese economy, warning that shocks to the broader economy will always be reflected in the bank’s performance.
When asked about global geopolitical tensions, particularly the ongoing war in the Gulf, Cordina said the threats posed largely mirror those of previous economic shocks, citing the Covid-19 pandemic, the war in Ukraine and the logistical disruptions caused by piracy off Africa’s east coast as examples.
“The shocks, as we are perceiving them, are not too dissimilar to those we have already experienced,” Cordina said, pointing to increases in oil prices and other commodities.
Malta has previously handled these shocks well, Cordina said, particularly thanks to the fiscal buffer in its economy and the liquidity of its banks.
“But this should not be a message of complacency or zero concern,” he was quick to add. “The situation is a problematic one and we need to continue monitoring, but without undue pessimism”.
“Ultimately, much depends on the duration of the conflict and possible escalations,” Cordina said.
Cordina was more coy when asked about whether the prospect of a general election at some point over the next year could signal any disruptions to the bank’s economic forecasts.
“In my experience, every election has been a story unto itself,” he said. “We will have to wait and see how this one plays out”.
Turning to the bank’s performance, Cordina, together with BOV CEO Kenneth Farrugia and CFO Kevin Cardona said the bank had registered strong results throughout 2025.
Profits down since 2024 but still higher than expected
The bank registered a profit of €260.4 million, an almost 14% (or €42 million) drop from the “outlier” year of 2024, with profit margins returning to 2023 levels.
Bank officials attributed this drop in profit to the bank’s heavy investment in its digital infrastructure, with the bank set to publicly launch a new mobile app over the coming weeks.
Customers will be connected to the new app on a staggered basis, Farrugia said, with all BOV clients onboarded by the beginning of next year.
The bank saw its total assets grow by just short of 10% to reach €16.5 billion in 2025, with customer deposits, loans and net interest incomes all increasing.
The bank’s strong economic performance will allow it to issue a total gross dividend of €130.5 million, or €0.2032 gross per share, the bank said.
This includes a one-off special dividend of €10.4 million which reflected how the bank had exceeded it’s planned profit of €250 million.
The banks said it forecasts a profit of between €210 and €250 million in 2026.