Bank of Valletta announced on Friday that it would not be paying out a cash dividend this year and was setting aside €75 million as a litigation provision.

Speaking during a press conference, BOV chairman Deo Scerri said the bank’s profit without the litigation provision was €146.2 million, an increase of 5.8 per cent when compared to the previous year.

BOV was last year slapped with a €363 million precautionary warrant by an Italian court.

The claim was filed by liquidators of the Deiulemar group and representatives of 13,000 Italian bondholders who lost all their life savings in a fraud scheme dating back to 2009.

Mr Scerri said BOV’s board intended to resume dividend payments in line with the dividend policy as soon as it was prudent.

He said the board had instead resolved to issue bonus shares at a ratio of one for every 10 ordinary shares held in the bank.

Mr Scerri said 2018 was a challenging year for the bank, both in terms of the legal challenges necessitating the litigation provision, as well as an increase in competition, including from non-banks.

The bank saw an eight per cent increase in costs, mainly attributed to an increase in human resources, with a particularly focus on compliance and anti-money laundering functions.

Mr Scerri acknowledged that the increase in due diligence checks had impacted the customer experience when opening a new bank account.

He vowed that the bank would continue investing in improving the efficiency and accessibility of these bank account opening processes.

‘Attacks still ongoing’

The BOV chairman said the bank was still under assault from hackers, one month after €13 million was stolen through a cyberattack.

Mr Scerri said the attack could have happened to anyone.

Explaining how the attack happened, Mr Scerri said a bank employee opened up a phishing e-mail that made its way through BOV’s filters.

The bank’s chairman said the employee failed to report that his computer screen went blank after opening it up.

BOV has recovered €5.6 million so far and is in the process of recovering a further €4.4 million. Mr Scerri said BOV would take all the necessary action to recover the remaining funds, although he expressed doubts as to whether this would be possible. 

He declined to elaborate on the timelines between the employee opening the e-mail and the money leaving the bank.

“Action was taken within hours of the money leaving the bank. It could have been much worse. There was some inconvenience to clients, but within 24 hours the bank was up and running again,” he said.

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