Author: Mel Chamber

Over 112 students and 43 educators from schools across Malta and Gozo gathered on Monday for the 15th edition of the Young People’s Summit, organised by Nature Trust – FEE Malta through the EkoSkola programme in collaboration with the Climate Action Authority and the Malta ESG Alliance.

The summit continued to provide a national platform where children and young people can actively participate in discussions related to climate action, sustainability, and the future they wish to see for Malta. Through interactive workshops and discussions, students shared ideas, concerns, and practical recommendations linked to environmental and climate-related challenges.

The event opened with welcome addresses by Mr Vincent Attard, President of Nature Trust – FEE Malta, Perit David Xuereb, Chairperson of the Malta ESG Alliance, and Ing. Abigail Cutajar, Chief Executive Officer of the Climate Action Authority.

During the summit, participating students engaged in workshop sessions focusing on the four main pillars of the Envision 2050 where they presented tangible SMART goals with several KPIs in line with the document’s objectives. This was followed by a question-and-answer session with company CEOs from the Malta ESG Alliance. The discussion gave students the opportunity to engage directly with leaders from the business sector on environmental responsibility, innovation, and sustainable practices. Pertinent questions raised and suggestions offered by the students related amongst others to transport, construction and well-being practices.

As a continuation of last year’s initiative, the Climate Action Authority also provided participants with a lunch box and a reusable Ġuża Ħanfusa drinking bottle, further promoting sustainable practices during the event.

The summit concluded with the presentation and approval of the final declaration containing the students’ recommendations and proposals. The Minister for the Environment, Energy, and Public Cleanliness, Hon. Miriam Dalli, attended this concluding session and addressed participants.

Speaking during the summit, Minister Miriam Dalli emphasised the importance of listening to children and young people when shaping climate and environmental policies, noting that initiatives such as the EkoSkola Young People’s Summit help ensure that students’ voices fuels national discussions and future action.

Mr Vincent Attard, President of Nature Trust – FEE Malta, stated that the EkoSkola programme has, for more than twenty years, continued empowering children to participate actively in environmental decision-making processes. He highlighted that students are not only expressing concern about environmental challenges but are also proposing the best practical solutions that can positively influence schools, communities, and the country as a whole. Mr Attard also thanked two corporate partners in the EkoSkola programme, HSBC Bank Malta and Atlas Insurance, who have been instrumental for this programme’s success in the Maltese Islands.

Ing. Abigail Cutajar reiterated that the Climate Action Authority considers young people important partners in climate action efforts and gave tangible examples of how the authority worked on the suggestions put forward by students in the past edition. She also stressed the importance of continuing to create spaces where students can meaningfully contribute to discussions on sustainability and environmental responsibility.

Perit David Xuereb highlighted the importance of collaboration between schools, public entities, and the private sector in building a more sustainable future, while encouraging continued dialogue between young people and businesses on environmental, social, and governance practices to ensure resilience in economic and wellbeing practices.

The declaration approved during the summit will continue contributing to ongoing discussions related to environmental and climate action initiatives, reinforcing the importance of youth participation in shaping a more sustainable future.

Since the Parliament is presently dissolved due to the upcoming general election, the yearly EkoSkola Parliament session will not be held this year. EkoSkola students will be presenting the declaration to the main party leaders in the coming days as a memorandum, to be considered for their respective electoral manifestos.

Bank of Valletta, in collaboration with the Gozo Business Chamber, organised a conference titled ‘Gozo’s Economy: The Context and Future Direction’, bringing together key stakeholders to discuss Gozo’s economic landscape amid an increasingly complex and uncertain global environment. The conference assessed Gozo’s economic performance, examined emerging challenges, and explored opportunities that can shape its future trajectory.

Malcolm Bray, Head of BOV’s Economics Department, delivered a presentation outlining the salient features of Gozo’s economy, highlighting both recent developments and the structural challenges shaping its future trajectory.

Gozo has continued to record economic growth broadly in line with Malta, although performance has remained more volatile, reflecting the island’s narrower and less diversified economic base. In 2024, Gozo generated close to €1 billion in gross value added, representing just over 4% of Malta’s overall economic output.

The population of Gozo has increased in recent years, mirroring national trends. Nevertheless, Gozo continues to face demographic pressures linked to ageing. Employment remains heavily concentrated in services, and unemployment remains low, underscoring a tight labour market.

Tourism activity has recovered strongly since the pandemic, supported by improved connectivity. However, Gozo continues to function primarily as a short‑stay destination. Property market activity has stabilised, with rents remaining more affordable than in Malta. Household wealth is among the highest nationally, largely reflecting high rates of property ownership.

Concluding his presentation, Mr Bray noted that “looking ahead, aligning investment, policy and finance with a higher‑value, sustainable and innovation‑led vision will be critical for Gozo to strengthen economic resilience while preserving its distinct identity.”

Juergen Attard, Senior Manager Policy & Research, Gozo Regional Development Authority (GRDA), focused on ‘Gozo’s Economic Future: Opportunities Through a Vibrant Start-Up Ecosystem’.  He remarked that “Gozo’s economy has made significant progress, with sustained growth and near full employment. The next phase is to build on this momentum by diversifying into higher value-added sectors and improving the quality of employment, ensuring that Gozitans can continue to live and work on the island. An important component of this transition is the development of a vibrant start-up ecosystem, supported by an integrated framework that encourages innovation, entrepreneurship, and higher value-added economic activity.”

Michael Galea, President of the Gozo Business Chamber, stated, “The real opportunity for Gozo is not to replicate Malta’s model, but to redefine its own. Gozo has to build a resilient, innovative and high-value economy.” This was echoed by Daniel Borg, Chief Executive Officer of the Gozo Business Chamber, who highlighted the growing number of high value-added companies in Gozo, especially in the digital sector, which are mainly local. “With the right enabling environment, we can move towards an ecosystem of companies, which can help other start-ups succeed in this sector.  Nonetheless, I believe that our focus should also revolve around youth. The Chamber, through the youth4entrepreneurship programme, is trying to instil in young entrepreneurs the confidence to pitch their business ideas about Gozo.  We should continue to develop further such a framework,” he added.

In his closing remarks, Kenneth Farrugia, Chief Executive Officer of Bank of Valletta, stressed that Gozo’s future depends on a clear shift towards quality‑driven, sustainable development, enabled through strong collaboration. He said that Gozo’s double insularity should be deliberately leveraged as a strategic advantage, positioning the island as an exclusive, high‑value destination supported by disciplined planning and responsible investment. Mr Farrugia outlined the need for targeted financing for quality tourism and value‑added enterprise, improved connectivity and digital infrastructure, and sustained investment in skills and talent retention, noting that BOV has a key role to play in enabling these outcomes. He concluded that turning vision into reality will require alignment between policymakers, the business community and financial institutions to ensure Gozo’s long‑term resilience and competitiveness.

Kenneth Farrugia and Daniel Borg also participated in the panel discussion, alongside Ivan Falzon, CEO of the Gozo Regional Development Authority (GRDA); Mario Buttigieg, CEO of Fiduscorp Limited; and Omar Tanti, CEO of Threls. The discussion focused on Gozo’s economic resilience and weaknesses, investment and access to finance, infrastructure and sustainability, digital transformation and talent, as well as entrepreneurship and capital attraction. 

Bank of Valletta has reopened its Xewkija Agency following months of extensive refurbishment works. The works entailed a complete overhaul of the internal layout, allowing for a more welcoming and modern look and feel. Furthermore, to complement the reopening of the Agency, residents now have access to a new ATM, which can be found inside the Local Council premises.

The completion of the regenerative project was inaugurated by the Bank’s CEO Kenneth Farrugia, Chief Personal and Wealth Officer Simon Azzopardi and Chief Operations Officer Ernest Agius, in the presence of Xewkija Mayor, Simona Refalo.

Speaking at the inaugural event, BOV CEO Kenneth Farrugia remarked that “with the reopening of our premises in Xewkija, we enter another phase of the Bank’s Renovation Program. The program aims to upgrade our customer touchpoints, and now marks 11 refurbished branches and agencies, two new Financial Well-being Centres, a new Investment Centre in Sliema, as well as a refurbished BOV Centre and a new Business Hub. This is in line with our objective of offering a better experience for our customers and a more pleasant working environment for our employees, thereby confirming our position as the Bank of Choice in both Malta and Gozo.”

Simon Azzopardi and Ernest Agius spoke about the importance of the Bank’s physical presence in Gozo, highlighting that, with over 30 branches and agencies across Malta and Gozo, Bank of Valletta is the island’s most physically present bank. In Gozo, that includes BOV’s main Victoria branch, agencies in Nadur, Xagħra and Xewkija, and the newly opened Sannat Financial Well-being Centre. This year, the Bank will make significant progress in the program, with further renovations planned. Ernest Agius also emphasised the work being done to reduce the Bank’s carbon footprint through several ESG-friendly measures that were implemented during the refurbishment works.

Xewkija Mayor Simona Refalo thanked Bank of Valletta on behalf of the residents for its commitment to renew and improve its services in the locality. She said that the residents are also appreciative of the newly installed BOV ATM, which is housed on the Local Council’s premises.

In the coming months, the Bank will continue working to improve the premises of its Branch network while enhancing its digital banking platforms.

HSBC Malta Foundation’s latest project supports Thrifty Baby, a new social enterprise launched by the Women for Women Foundation. The initiative provides affordable, high-quality baby clothing for children aged 0 to 3 years while promoting sustainability and community involvement.

Thrifty Baby addresses two key challenges, reducing textile waste and providing families with essential clothing at accessible prices. Mothers referred by social workers can use vouchers through the Women for Women Foundation to select items for their children, ensuring dignity, independence, and choice.

“Thrifty Baby combines sustainability with practical support for families,” said Glenn Bugeja, from HSBC Malta Foundation. “By supporting mothers and engaging the community, the project reflects the values our Foundation champions and demonstrates the positive impact partnerships can achieve.”

“This project goes beyond affordability,” said Elaine Compagno, representative of Women for Women Foundation. “It’s about building connections within the community and promoting a circular economy. HSBC Foundation’s support has been essential in bringing this initiative to life.”

HSBC Malta Foundation’s sponsorship supports the shop coordinator role, allowing the team to focus on achieving real social and environmental outcomes. Through Thrifty Baby, families gain access to affordable essentials, while the broader community contributes to extending the lifecycle of clothing and reducing waste. The project highlights how social enterprise can address environmental challenges while meeting the practical needs of families.

The first quarter of 2026 represented a solid start to the financial year for the Bank of Valletta Group, characterised by continued balance‑sheet growth, resilient core operating income and disciplined execution of its strategy. For the first quarter of 2026, the Group announced a Profit Before Tax of €54 million, representing a decrease of 19.5% over the same period in 2025.

During the period, the Group delivered a resilient core operating performance, supported by strong capital and liquidity positions. Solid business activity sustained core income, with net interest income benefiting from continued lending growth and disciplined treasury management, underpinned by a stable, high‑quality funding base. Net Fee and Commission Income remained stable, reflecting strong customer activity and reinforcing the Group’s income diversification strategy.

The bottom line profitability was shaped by specific, non‑recurring factors, including heightened geopolitical tensions that led to increased financial‑market volatility. While not impacting the Group’s core operating activities, customer behaviour or portfolio performance, this resulted in an unrealised valuation impact on the equity investment portfolio. Consequently, a net trading loss of €3.6 million was recorded when compared with a gain of €5.5 million in 2025. This was not material and did not affect the Group’s capital strength or liquidity position.

Profitability was also influenced by higher impairment charges, reflecting specific and identifiable credit developments rather than a deterioration in the broader credit environment. The Group recognised an impairment charge of €5.6 million during the period, primarily driven by the continued material growth in the commercial lending book and the increase in stage 1 assets. Notwithstanding these charges, asset‑quality indicators remained strong, supported by prudent underwriting standards and disciplined credit‑risk management.

Performance Highlights

• Profit Before Tax amounted to €54 million, down from €67.1 million.
• Net Interest Income stood at €100.2 million, up from €92.5 million.
• Net Fee and Commission Income increased from €20 million to €20.2 million.
• Operating costs totalled €61.7 million, up from €52.8 million.
• Cost‑to‑income ratio increased to 51.8% from 44.7%.
• Return on Average Equity (pre-tax) decreased to 14.2% from 17.9%.
• Deposits increased by €351.9 million, surpassing the €14.1 billion mark.
• Total assets stood at €17 billion, up from €16.5 billion in December 2025.
• The credit portfolio reached €8.3 billion, up from €8 billion in December 2025.
• Net Asset Value per share stood at €2.4, up from €2.3 in December 2025.
• Capital ratios remained strong and above regulatory requirements.

The Group continues to monitor the evolving geopolitical environment and its potential impact on the Maltese economy and the financial system and maintains enhanced monitoring across key risk dimensions. The assessment remains that Malta entered the current period of heightened geopolitical uncertainty from a position of relative strength, supported by resilient economic growth, low unemployment, moderating inflation and sound public finances.

The Group’s risk management framework incorporates forward looking scenario analysis and early warning indicators to identify emerging stresses. To date, these have not signalled any material deterioration in customer behaviour or portfolio performance. This approach ensures that the Group remains well positioned to absorb potential shocks and continue supporting customers and the wider economy amid an increasingly uncertain global backdrop.

“Resilience, disciplined execution and strong fundamentals” – Chairperson Dr Cordina

Commenting on the Group’s performance, Chairperson Dr Cordina stated, “The Group delivered a strong start to the year, reflecting resilience, a disciplined approach and solid fundamentals. This performance was achieved in a stable economic environment, alongside the expected normalisation of earnings, interest rate stability and a renewed period of geopolitical uncertainty.

From a market standpoint, the Share Buyback Programme continued to support trading activity in the Bank’s shares, while preparations are now underway for the issuance of a €300 million Senior Preferred Instrument, subject to regulatory approval. Supported by a strong capital base, resilient day‑to‑day performance and consistent execution of our strategy, the Bank’s share price rose to highs of €2.14 during the period.

Looking ahead, the Group remains well positioned to deliver a profit before tax for the year in the range of €210 million to €250 million, in line with previous guidance. We also remain committed to rewarding our shareholders and intend to maintain our policy of distributing up to 50% of after‑tax profits, subject to prevailing market conditions.”

“Yet another strong financial performance by the BOV Group” – CEO Kenneth Farrugia

CEO Kenneth Farrugia said, “I am pleased to report another strong performance by the BOV Group, building on the positive results delivered in 2025. During the first quarter of 2026, the Group sustained resilient operating performance, continued to grow its balance sheet and maintained sound asset quality, sustained lending and treasury activities, supported by a diversified business model.

The depth of our deposit base reflects the confidence our customers place in our credibility and long‑term approach. The growth and diversification of our corporate loan book support key commercial economic sectors, while the consolidation of our corporate services under one roof and the broadening of our service offer through non‑life insurance further strengthen our position as the Bank of Choice in Malta.

These results reflect strong fundamentals and continued customer trust. With the largest network of customer touchpoints in Malta, and a resilience underpinned by strong investment‑grade credit ratings, the Group is uniquely positioned to deliver stability and consistency while remaining deeply embedded in Malta’s economy. As we enter the final year of our strategic cycle, our focus remains on disciplined execution, responsible banking and the creation of long‑term value for all our stakeholders.”

Financial Performance

Net Interest Income for Q1 amounted to €100.2 million, an increase of €7.7 million when compared to 2025. Growth was recorded in both loans and advances to customers underscoring the relevance of BOV’s products within the lending sector and equally important income from disciplined treasury management. Net Fee and Commission Income is reported at €20.2 million, a marginal increase of 1.1% from the same quarter last year, reflecting resilient customer activity with continued strength in cards and credit-related fees, consistent with ongoing shifts towards digital payment solutions.

Operating costs at end March 2026 totalled €61.7 million, an increase of €8.9 million over Q1 2025. This reflects higher personnel and IT costs, depreciation charges and contributions to the Depositor Compensation Scheme. As a result, the cost‑to‑income ratio increased from 44.7% in 2025 to 51.8%, consistent with the expected low‑to‑mid‑50% range outlined in the forward guidance.

The return on average equity (pre-tax) declined to 14.2%, down by 3.7 percentage points compared to 2025, consistent with the expected range communicated earlier this year and very much influenced by the one off profitability movements and the increased equity base. Earnings Per Share decreased to €0.056 compared to €0.069 for 2025 (restated for bonus issue in Q2 2025), reflecting the lower profit before tax for the quarter and the ongoing share buyback programme that partially mitigated the decline.

Asset quality indicators remain strong, with the NPL ratio improving to 1.57%, while ECL coverage ratio for credit-impaired assets stood at 55.1%, reflecting a sensible provisioning stance while continuing to benefit from improving portfolio quality and dynamics.

Financial Position

Total assets stood at €17 billion in March 2026, up by approximately half a billion when compared with 2025. This represents a new high for the Group, with growth reflecting sustained balance-sheet expansion, consistent with the strategic focus on supporting domestic economic activity while maintaining strong liquidity and funding discipline. The Treasury portfolio has now reached €7 billion in Q1 2026, an increase of €119.3 million, reflecting the Group’s deployment of excess liquidity into high-quality debt securities.

The credit portfolio continued to grow, with the balance reaching €8.3 billion in the first quarter, reflecting strong momentum in customer lending. As a result, the gross loan-to-deposits ratio increased from 59% in December 2025 to 59.5% during the quarter. Deposits experienced another significant increase of €351.9 million or 2.6% during the first quarter of 2026, surpassing the €14.1 billion mark, reflecting the strength of the Group’s retail franchise driven by an increase in both retail and business deposits. As a result, the Group maintained very strong liquidity position, with the LCR ratio of 385.8% well above the minimum regulatory requirements.

The Group’s total equity closed at €1.5 billion, marginally higher from December 2025 with the Net Asset Value per share standing at €2.4 per share (December 2025: €2.3 per share), further strengthening the underlying book value position. The Group’s capital ratios remained strong and comfortably above regulatory requirements.

Bank of Valletta is urging the wider public to take its new Spot the Scam Self-Assessment, a free online tool designed to help people recognise scams and warning signs and respond safely when it matters most. The free online tool forms part of the Bank’s ongoing efforts to strengthen scam awareness. It can be accessed through this link and takes only a few minutes to complete.

As scams become more convincing, often relying on impersonation, urgency and emotional pressure, education remains one of the strongest defences against this modern threat. The self-assessment tool supports a simple habit to stop, think and verify before clicking links or acting on unexpected requests. It also helps the public understand that it is never safe to share passwords, one-time codes, or other personal data, while not allowing urgency to force wrong decisions.

To promote scam education, the Bank regularly shares practical guidance on its website and social media channels. It also runs interactive campaigns and quizzes to help participants test their knowledge. The Bank also participates in local community sessions and customer events to explain common scam tactics. In parallel, the Bank provides its employees with the necessary knowledge to guide customers make the right choices when it comes to mitigating fraud.

Commenting on the wide range of activities being organised by the Bank, Ryan Caruana, Group Chief AFC Officer and MLRO at BOV said that “Fraud prevention isn’t only about the correct use of technology. It is also about the choices we make every day. If something doesn’t feel right, we must pause before acting and verify through trusted channels when in doubt. This self-assessment tool is the latest addition in our ongoing battle against fraud. It is designed to help the general public recognise warning signs and make wise decisions. We encourage the public to take the test and to share it with friends and family, because a short conversation today can prevent a serious loss tomorrow.”

These initiatives also support the Bank’s ESG commitments under the social pillar as they promoting holistic financial well-being and also strengthens protection for those who may be more vulnerable to fraud.