Lombard Bank has registered a pre-tax profit of €28.8 million for the year ending December 31, 2022. The group profit stood at €27.7million.

In a statement, the bank said the main performance drivers were mainly improved interest income streams and the recovery of a non-performing commercial loan.

In spite of the good results, the bank said that in view of the outcome of the November 2022 extraordinary general meeting, when its plans to expand its capital base by the issue of new shares were blocked by the qualifying shareholder, the conservation of capital had to take precedence so the board could not recommend the payment of a dividend.

However, it proposed to issue one bonus share for every 45 shares held, so that the bank’s capital will not in any way be reduced.

'Uncomplicated, forward business'

Bank CEO Joseph Said said the bank’s performance in 2022 was a positive one both in terms of financial results as well as progress registered in the implementation of its strategic priorities.

"We are proud of our uncomplicated, straight forward and transparent business model, which continues to serve us consistently well also to the benefit of all stakeholders.” In respect of the capital raise and the blocking of the related plans by the qualifying shareholder, Said added “we look forward to having this issue resolved, sooner rather than later, thereby allowing the bank to proceed with its plans for growth."

The bank said net interest income rose by 14% to €22.3 million when compared to the previous year, mainly driven by loans and advances to customers rising by 11% to reach €711.6 million.

Net fee and commission income improved by 4% to reach €5.4 million, supported by a positive trend registered in the bank’s various business lines.

Group operating costs fell by 15% to €20.9 million, with the bank’s cost efficiency ratio easing to 57.4% (2021: 60.8%), a reflection of effective cost management.

In respect of “expected credit losses” a write-back of €16.2 million was accounted for, compared to €1.5 million in the previous year.

This resulted from the full recovery of the bank’s single largest non-performing loan and the reversal of pandemic-related management overlays set in previous years, reflecting the then-prevailing economic circumstances.

Loans and advances to customers reached €711.6 million, while amounts owed to customers stood at €1,008.4 million.

The bank reported that a strong liquidity position was maintained with advances to deposits ratio at 70.6%, compared to 65.8% at the end of the previous year.

Net asset value per share stood at €1.50 (2021: €1.53).

Post-tax return on equity was 12.8% (2021: 5.7%).

Lombard said that by way of an update in respect of its strategy, it remained committed to growing prudently while stepping up investment in its distribution network, human resources and information technology.

In this regard, it continued to expand its physical retail presence in response to rising customer demand and to further grow its support functions.

The bank said it will remain close to the Maltese community, both at a commercial as well as at a retail level.

In this regard, the bank is currently reviewing its core transaction processing systems, digital channels and card services, and plans further investment in the prevention of anti-money laundering/combating the financing of terrorism and regulatory reporting systems.

In terms of its environmental, social, and governance programme, the group considered itself to be well placed to meet regulatory expectations, as well as to contribute towards reducing the impact of its operations on the environment.