Author: Mel Chamber

Bank of Valletta announced a strong profit before tax of €67.1 million for the first quarter of 2025, an increase of 5.3% over the same period in 2024. These results for the BOV Group were the outcome of a positive performance on both the revenue side and operational costs. It reflects the Bank’s focus on strengthening income from its key lines of business, increasing net fee and commission income, its strategic push to reallocate funds from liquid cash assets to the Bank’s investment portfolio, as well as the strategic balance sheet repositioning effected by the Bank since 2022.

During this period the Bank continued its efforts on increasing shareholder value, enhancing its capital structure and market position through the initiatives announced earlier this year, including a proposed bonus issue, a share buyback, and a bond issuance planned for the coming months. The Group remains on track to sustain its performance and deliver a profit before tax for 2025 in a range between €200 million and €250 million.

Financial Performance

Bank of Valletta registered a total operating income of €118.0 million for this period, which is marginally higher than that of 2024 (€117.4 million). Total costs for the first quarter amounted to €52.8 million, which was 7.5% above the same period in 2024, with personnel costs remaining the primary cost driver, followed by higher regulatory costs due to increases in the Bank’s deposit base and continued investment in technology-related expenses supporting the Bank’s drive for digitalisation.

The Group’s commitment to enhance the credit quality of its loan portfolio has led to a reduction in the non-performing loans ratio, closing at 2.5% at the end of the first quarter of 2025 compared to 2.7% at the end of December 2024.

The key highlights of the Group’s performance are shown below:

Performance Metric	Q1 2025	Q1 2024
Profit Before Tax	€67.1 m	€63.7 m
Net Interest Income	€92.5 m	€98.3 m
Net Fee & Commission Income	€20 m	€18.7 m
Cost to Income Ratio	44.7%	41.8%
ROAE Ratio (pre-tax)	18.8%	19.8%
Earnings Per Share	€0.076	€0.072
Net Asset Value per Share	€2.49	€2.41
Gross Loan-to-Deposits Ratio	56.7%	54.5%   (Dec 2024)
Profit from Insurance Associates	€2.0 m	€1.9 m

The Group’s total assets increased by €549.2 million from year end 2024 to €15.6 billion as at end March 2025. Deposits experienced a slight increase of €2.9 million and the Bank’s Treasury Portfolio has seen significant growth, with a 9.5% uplift in investments during the period under review to reach €6.9 billion. The Group’s total equity closed at €1.5 billion, with capital ratios remaining strong and above regulatory requirements.

Strengthening Balance Sheet and operational systems to provide secure, reliable and innovative banking services – Chairman Dr Gordon Cordina

BOV Chairman Dr Gordon Cordina, stated that “The results obtained during the first quarter of 2025, both from an operational and financial perspective, indicate that the Bank is well-positioned to meet the targets for this financial year. Our focus on technological innovation, strategic balance sheet management and enhanced income diversification positions us favourably for sustained growth going forward. These results affirm our resilience and preparedness to capitalise on emerging opportunities whilst mitigating potential risks.

Our primary objective remains to provide shareholders with sustained and stable returns. We continue to maintain high capital and liquidity buffers, while adopting a proactive balance sheet management approach to optimise income and profitability levels. This strategy will be reinforced by additional long-term debt issuances in the coming months to support our growth strategy and the resultant need for increased risk-weighted assets.

Bank of Valletta has the necessary means and resources to continue to support the stable and sustained growth of the Maltese economy going into the future. In a situation of turbulence in the international scenario, with potential effects on national economic activity, as well as in the context of fundamental changes in the banking sector in Malta, Bank of Valletta will continue to remain strongly capitalized and active in servicing existing and new business and personal clients through a variety of products and channels. The Bank is making significant investments in the strength and quality of its balance sheet, as well as in its operational systems, to provide secure, reliable and innovative banking and financial services to its growing customer base.

I would like to thank our various stakeholders, including our loyal shareholders for their unwavering trust and support, as well as our employees for their continued drive and commitment.”

BOV sustains momentum with notable improvements in its core lines of business – CEO Kenneth Farrugia

Echoing Dr Cordina’s remarks CEO Kenneth Farrugia stated, “I am extremely pleased with the Bank’s performance for the first quarter of 2025, as we continue sustaining the momentum gained at the end of 2024. The Bank registered growth across its core lines of business, with notable improvements in credit-related activity including business, home and personal loans, increases in card-related fee income and also a significant growth in investments business.

We are now entering the second year of our current strategy, with a commitment to sustaining these results while transforming our business and operations to enhance the experience for both our personal and business customers, as well as our employees. To sustain this, we have launched a number of new initiatives covering customer engagement, business process re-engineering, IT and Cyber Security, as well as regulatory compliance.

It gives me great pleasure to see the Bank’s efforts recognised internationally, especially with Fitch Ratings announcing an upgrade of BOV’s Long-Term Issuer Default Rating and Viability Rating. This positive development follows the recent credit rating upgrade by Standard and Poor’s at the end of last year. I take this opportunity to thank our leadership team and employees for their dedication in pursuit of excellence, which augurs well for the continued success and growth of the Bank in the coming months.”

Embedding the values of sustainability in decision-making

During this period under review the Bank continued to make progress in its sustainability journey, building on its foundation for long-term sustainability and financial resilience by embarking on various initiatives aimed at the reduction of carbon emissions. The Bank has set ambitious scope 1 and scope 2 emission reduction targets, with the ultimate aim of leaving a positive impact on the environment and on society at large. 

In addition to the internal operational initiatives, the Bank is actively promoting green financing and investment products. The CEO went on to say that “over the last few years we have launched several initiatives aimed at encouraging sustainable practices among our clients, including offering preferential loan rates for environmentally-friendly projects and investments in renewable energy. By embedding the values of sustainability in our decision-making processes, the Bank is not only supporting the green economy but also ensuring that our growth strategy aligns with global efforts to combat climate change. These initiatives reflect Bank of Valletta’s commitment to drive positive environmental impact while fostering long-term economic stability and growth”.

At the conclusion of the celebrations commemorating its 50th anniversary, Bank of Valletta provided its employees with a chance to showcase their photography skills. Eleven employees were selected to exhibit their works at an exhibition held on the ground floor of the Bank of Valletta Centre in Santa Venera.

Bank of Valletta encourages the artistic expression of its employees

Ernest Agius, Chief Operations Officer, emphasised that although art and banking may seem to belong to disparate worlds, creativity is an essential skill in both fields because it drives innovation, helps solve problems, and improves communication.

Events like this exhibition play a crucial role in fostering a sense of community among employees. “The main goal of this exhibition is to bridge the gap between the work that employees do outside of their jobs and their professional lives,” stated Mr. Agius.

Bank of Valletta actively supports art and culture in Malta

Bank of Valletta has played a significant role in supporting art and culture in Malta for decades. This exhibition showcases the bank’s ongoing commitment to staying vibrant and dynamic. The photographs, taken by eleven employees, are organised into themes that reflect BOV’s Corporate Social Responsibility (CSR) initiatives and focus on various subjects, including art and culture, architecture, history, the environment, and social issues. The employees showcasing their work include Brian Agius, Michelle Attard, Kurt Mario Bonello, Georges Boulanger, Robert Bugeja, Claudine Despott, Tonio Ellul, Ivan Gatt, Clare Piscopo, Carmela Loredana Umbro, and Ryan Zammit.

Charles Azzopardi, Head of CSR, noted that there is a dedicated space on the ground floor of the BOV Centre in Santa Venera, specifically designed to display the talents of employees, among other initiatives. In the past months, the Bank hosted an art exhibition featuring sixteen artworks created by its own employees.

Bank of Valletta’s CSR strategy emphasises dedication and commitment to cultural initiatives. This exhibition is open to Bank employees and all visitors attending appointments at the BOV Centre in Santa Venera. The Centre has undergone renovations in recent months.

The Facts: Under Item 14 of Part Two to the Fifth Schedule of the Malta VAT Act (Chapter 406 of the Laws of Malta), the supply of water services is exempt (without credit) only when such supply is made by a public authority.

This exemption applies, for example, when Malta’s Water Services Authority supplies water directly to end-users, whether households or businesses. However, the exemption is narrowly framed and does not extend to recharges or onward supplies of water by private entities.

In practice, this distinction becomes particularly relevant in scenarios such as the rental industry. Where a landlord receives a VAT exempt water bill from a public authority and subsequently recharges that same cost to a tenant, the landlord is not supplying water as a public authority. As a result, the recharge:

• does not fall within the scope of the exemption, and
• is subject to VAT at the standard rate of 18%.

This position reflects the settled principle in VAT law that exemptions are to be interpreted strictly, and that a recharge does not inherit the VAT treatment of the original supply where the conditions of the exemption are no longer met.

Conclusion: Water services are only exempt (without credit) when supplied by a public authority, otherwise VAT at the standard rate of 18% applies.

Verdict: False

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Authors: Brandon Gatt, Partner, Zampa Partners & Valentina Bruno, VAT Associate, Zampa Partners

As the world came together to mark Earth Day 2025 on the 22^nd April, Bank of Valletta reaffirms its commitment to sustainability – not just as a business priority, but as a shared responsibility embedded in its culture and day-to-day operations.

This year’s Earth Day theme, Our Planet, Our Power, places the spotlight on the collective responsibility to protect natural resources – a responsibility that BOV has embraced, not just in principle, but in practice. In fact, the Bank is not only investing in sustainable operations and products, but also in educating and empowering its people to make greener choices – both at work and beyond.

“Sustainability is not something we talk about on Earth Day. It’s a mindset that drives how we work, think and lead,” said Ernest Agius, Chief Operations Officer at Bank of Valletta. “We’ve built our green strategy around long-term value, not just for the Bank, but also for the communities we serve, and the environment we all share. Our role as a founding member of the Malta ESG Alliance also reflects our commitment to real, measurable change — both in reducing our own footprint and in supporting customers and partners on their green journey.”

The Bank has introduced numerous eco-efficiency projects aligned with international ESG standards, including efforts to reduce Scope 1, 2, and 3 emissions. In recent years, BOV has significantly cut its energy and paper use, such as digital signatures and streamlined printing that continue to significantly cut down resource consumption. It has also modernised its workspaces with energy-efficient infrastructure, and developed financing solutions that support clean technologies and sustainable investments.

The Bank is also focusing on raising awareness, engaging employees, and driving education around environmental responsibility in practice. Through internal campaigns, and team initiatives, employees are encouraged to think green and act responsibility. Every member of staff is also given a day of paid volunteering leave annually, empowering them to contribute to environmental and community-focused projects.

Earlier this year, the Bank also supported Earth Hour on the 22^nd March, continuing its efforts to align with global campaigns that highlight the importance of environmental action.

“We are proud of the progress we’ve made – but more importantly, we are excited about what lies ahead,” added Mr Agius. “We are committed to leading by example, learning as we go, and encouraging others to join us on this journey.”

With a clear roadmap, measurable goals, and a culture that prioritises sustainable growth, the Bank is determined to drive meaningful change – for its people, the planet, and future generations.

10 students were inducted into the Dean’s List within the Faculty of Arts at the University of Malta. This is the 29^th consecutive year that eligible students have been inducted into this prestigious list, which has enjoyed Bank of Valletta’s support since its inception.

Eligibility for the Dean’s list is very stringent where students must complete a minimum of 120 ECTS in their first two years of studies. Students must obtain a minimum 80 ECTS with a grade ‘A’ or better, 20 ECTS with a Grade B+ and 20 Passes with no fails.

The 10 eligible students were invited to celebrate their achievement at the Faculty of Arts Library with the Dean of the Faculty of Arts Prof Dominic Fenech and Charles Azzopardi, Head CSR at Bank of Valletta. All inductees were presented with a commemorative certificate as well as a monetary donation by the Bank.

“This is the sixth consecutive year that the number of students inducted in the Dean’s list is in double figures, testament to the dedication and hard work of both these exceptional students as well as to the academic staff at the Faculty,” said Prof Fenech. “When considering that 10 students, from a faculty boasting around 300 graduates a year, made it into the Dean’s list, we must really appreciate the magnitude of their achievement. Still, the number attests to the improving quality of the Faculty’s undergraduates, when one considers the lower numbers of past years.  Joining the Dean’s List, besides bringing personal satisfaction in itself, opens doors for excellent career opportunities as it demonstrates a strong work ethic and commitment.”

“This long-term partnership between Bank of Valletta and the University of Malta underscores the Bank’s commitment to fostering educational excellence and supporting the next generation of leaders in their respective fields”, said Charles Azzopardi. The success of these students is an inspiration to all, and we take this opportunity to congratulate them on their fantastic work and we are sure they will continue to strive for greatness in all their endeavours.

The 2025 inductees into the Dean’s List are:

• Abela Marlena (B.A. Psychology/Sociology)
• Amin Omran Fatima (B.A. Hons Anthropology with Psychology)
• Borg Aimee (B.A. European Global History/Knowledge and Information Management)
• Brincat Francesca (B.A. French/German)
• Cachia Bradley (B.A. Hons Maltese with Communications)
• Camilleri Tyler Luke (B.A. Hons German with International Relations)
• Ellul Luca (B.A. Hons Linguistics with Maltese)
• Polidano Jonathan (B.A. Hons Geography with Arabic)
• Porter Nicole (B.A. French/Spanish)
• Spiteri Nathania (B.A. Hons Sociology with Philosophy)

BOV Asset Management made a meaningful gesture to Puttinu Cares through a philanthropic donation made on behalf of their institutional clients. The donation was presented during a client appreciation event held at the Bank’s Premium Centre in Santa Venera.

This initiative, now in its second edition, forms part of Bank of Valletta Group’s broader ESG and social impact goals and highlights the Bank’s commitment to support causes that enrich the lives of the vulnerable and the wider community. It is an innovative way of replacing corporate gifts normally associated with events such as Christmas with charitable donations, thereby giving clients the opportunity to be part of a wider purpose in supporting families in need.

Speaking at the event, Peter Paul Cilia, the newly appointed Head of BOV Asset Management, remarked, “This initiative goes beyond simple gestures; it is a practical way of making a real difference, supporting Puttinu Cares and helping families during difficult moments in their lives. Our clients’ support in this makes it all the more meaningful.”

Kenneth Farrugia, the Bank’s CEO added, “Puttinu Cares represents the very best that local community organisations offer – compassion, strength and unwavering support for the vulnerable. We are proud to stand by them and help ease the burden for those families going through unimaginable challenges. This donation reflects not just our values as a company, but also those of our clients, who continue to embrace and support this initiative”.

The donation was presented to Angele Cuschieri, President, Rennie Zerafa, CEO, and Malcolm Custo, vice-President of the Puttinu Cares Foundation. On accepting the donation, Angele Cuschieri expressed heartfelt thanks on behalf of the foundation and stated that “We are incredibly grateful for the continued support from Bank of Valletta. Donations like these allow us to keep offering hope to patients and their families. As we look ahead to our annual Good Friday Night Walkathon, this gesture strengthens our mission and reminds us that we are never alone in this journey.”

This year’s Good Friday Night Walk marks its 20^th edition. This popular activity remains one of Puttinu Cares’ most significant fundraising events, seeing thousand of people walking from Mellieħa to Floriana during the night between Maudy Thursday and Good Friday. In support of this cause, the Bank’s Sports and Social Club will be organising a group of employees and friends to take part in the night walk, with several employees already signed up to participate.

As part of the celebrations for Global Money Week 2025, themed “Protect your money, secure your future”, the HSBC Malta Foundation and JA Malta teamed up once again to deliver an energetic, hands-on financial literacy experience for local students.

The Economics of Life Hackathon, hosted at St Clare’s College Pembroke, brought together 22 teams of young teens aged 12 to 14 who were eager to test their skills in budgeting, planning, and real-life money decisions. With creativity and energy buzzing in the room, students were challenged to work through a “Teen Life Planner” scenario—balancing a budget, making smart choices, and staying focused on a future goal.

It wasn’t just about numbers. The hackathon pushed students to think on their feet, work as a team, and present their strategies with confidence. Throughout the event, Duncan Triganza from HSBC Malta and Petra Ellul Mercer from JA Malta maintained high energy levels, fostering a dynamic and competitive atmosphere.

By the end of the event, it was clear that these young minds are more than capable of making savvy financial decisions when given the chance. Big congratulations go to Newark School, St Augustine School, and St Benedict School, who claimed the top three spots with their smart, strategic, and creative solutions.

Reflecting on the initiative, Matthew Caruana, CEO JA Malta commented, “Financial Capability is more than just understanding money—it’s about building a mindset that helps young people protect their future. This hackathon provides a practical and engaging platform for students to apply economic concepts in real-world scenarios which they are accustomed to.”

Glenn Bugeja at HSBC Malta Foundation added: “At HSBC Malta, we believe that financial literacy should be nurtured from an early age, giving young people the tools they need to make informed and responsible financial decisions. The enthusiasm and ingenuity displayed by the students during this hackathon are a testament to the importance of such initiatives in shaping future generations.”

This hackathon aligns with the broader efforts of HSBC Malta Foundation and JA Malta to prepare today’s youth for tomorrow’s financial realities. With the talent and energy displayed during this event, the future looks promising and financially secure. By investing in knowledge and fostering critical thinking, HSBC Malta continues to play a key role in preparing students for the financial challenges and opportunities ahead.

Bank of Valletta is reinforcing its commitment to sustainable business growth through the BOV SME Grow Green Loan, a financing solution designed to help small and medium-sized enterprises (SMEs) transition to greener operations. This initiative was highlighted by Mark Scicluna Bartoli, Head of Product Development at BOV, during the MHRA BOV Deloitte Q4 2024 Hospitality Performance and European Hospitality Industry and Investment Survey presented a few weeks ago.

BOV recognises that for SMEs, accessing financing for sustainable projects can be a challenge. The BOV SME Grow Green Loan is specifically designed to ease this financial burden, ensuring that businesses investing in environmentally friendly initiatives benefit from better lending conditions. By offering a lower interest rate, this product encourages SMEs to take decisive steps toward reducing their carbon footprint and environmental impact.

A key advantage of this loan is its ability to make green investments more affordable. SMEs can benefit from a 1% reduction in interest rates, making it a more cost-effective solution for energy-efficient systems, renewable energy projects, or other carbon-reducing initiatives. This initiative aligns with BOV’s wider Environmental, Social, and Governance (ESG) strategy to contribute to Malta’s sustainability goals.

Speaking at the event, Mark Scicluna Bartoli emphasised the importance of integrating sustainability into business strategies, highlighting how the BOV SME Grow Green Loan can help SMEs thrive in a changing economic landscape.

The Bank works closely with businesses to understand their transition plans, helping them explore options that may include a combination of bank financing and government incentives. By taking this proactive approach, BOV ensures that businesses receive the necessary expertise and resources to make informed investment decisions.

As businesses face increasing pressure to adopt greener practices, BOV is providing the financial support and advisory services needed to make this transition feasible.

Businesses interested in learning more about this financing solution can visit www.bov.com or contact  BOV Business Development Unit on 2275 7111 or via email on businessdevelopment@bov.com.