Author: Mel Chamber

The Bank of Valletta Group has just announced a strong and sustained financial performance for the nine months ending September 2024, with a profit before tax of €223.7 million, up by 36.9% over the same period last year. This positive performance is the result of the continuous expansion of loan portfolios, a drive to improve and diversify net fee and commission income, as well as the Bank’s continued focus on its balance sheet optimisation strategy.

The Group’s operating income increased from €315.9 million to €359.2 million compared to the same period in 2023. This is reflected in a 14.5% rise in Net Interest Income and a 5.4% increase in Net Fee and Commission income over the same period in 2023. The credit portfolio has also shown consistent growth, resulting in a 9.1% increase primarily due to sustained growth across all segments including business loans, home loans and personal loans. The positive performance was also prevalent on the asset quality side, where the overall non-performing exposures ratio decreased to 2.8% of total balances, as compared to 3.1% in December 2023.

The investments book maintained an upward trend and increased to €5.9 billion as a result of the purchase of high-quality paper instruments, generating interest income of €92 million over the nine-month period under review. Most of these investments are measured at amortised costs, aligning with the Bank business model to hold securities until maturity to collect interest revenues. On the liabilities side, customer deposits increased by 1% since the beginning of the year, with the increase coming from both personal and non-personal customers.

When excluding strategy related costs, operating costs registered an increase of 4.0% compared to the same period in 2023, aligned with the Group’s efforts to prioritise talent, compensation and benefits, technological advancements and regulatory compliance. In this vein, operational efficiency continues to attract a high level of focus, with the cost-to-income ratio standing at 42.1%, which is 4% lower than the 46.1% achieved in the same period in 2023, driven by cost management and procurement excellence initiatives.

The Group’s liquidity remains well above the minimum regulatory requirements, as do the Group’s capital ratios. Pre-tax Return on Average Equity stands at 22.5%, representing approximately an improvement of 3.8% over the equivalent number recorded in the same period last year. The net asset value per share at the end of the third quarter of 2024 stood at €2.4 per share as compared to €2.2 per share as at December 2023.

Sustaining BOV’s positive momentum – Dr Gordon Cordina, Chairman

BOV Chairman Dr Cordina expressed satisfaction on the Bank’s sustained performance. “Bank of Valletta has been on a positive trajectory for a good number of months. We have adopted strategies to ensure sustained growth in our core business areas, strengthening our balance sheet position, managing costs, improving operational efficiency, while focusing on customer centricity and sustainable growth. These results follow the recent announcement of an interim cash dividend of €0.0924 gross per share, as well as the €100 million 5% unsecured subordinated bond issue that closed within 2 days of launch following overwhelming response by investors.”

Speaking about the economic scenario, Dr Cordina commented, “The latest economic statistics and forecasts point to relatively benign conditions in Malta, with positive effects on the Bank’s business development initiatives and the quality of its assets. Looking forward, the Bank will continue to sustain economic growth within a wider development context of increasing productivity and investment in ESG dimensions, which are fundamental for longer-term business competitiveness and credit quality”.

Delivering strong financial and operational results – Kenneth Farrugia

CEO Kenneth Farrugia commented, “These results reflect the Bank’s efforts towards sustained growth and progress. We have continued to invest in technology, business process reengineering and above all, the customer experience, as part of our medium-to-long term transformation strategy. BOV has also made considerable progress in its ESG journey, setting ambitious emissions reduction targets, aligning with the latest reporting standards, and taking the leading role in influencing local businesses to transition to green. We have also been active on the personal front, with the launch of our Green Home First and Green Home Plus loan products.

Looking ahead, the Bank remains strongly committed to adapting its business and operational model to market dynamics, continue driving innovation across products, services and processes and foster an organisation-wide culture of service excellence. All these initiatives will enable the Bank to strengthen its focus on stakeholder value, customer centricity and operational efficiency, and equally sustain its performance in the years ahead of us.”

Both Dr Gordon Cordina and Kenneth Farrugia thanked customers, shareholders, and employees for their continued support and commitment to the Bank as it supports the growth and development of Malta’s economy and seeks to achieve its overarching goal of being the Bank of Choice and Employer of Choice in Malta.

TradeMalta offers a range of services specifically tailored for both the experienced exporters and for those businesses planning to make that first step into the world of internationalisation.  The organisation offers a number of funding incentive schemes and financial support for companies looking to expand, allowing them to reduce the financial burden associated with international growth.

Additionally, TradeMalta offers various training programs and workshops, specifically designed to equip businesses with the skills needed for international trade. These training sessions cover topics such as export management, logistics, international marketing, and financing, ensuring businesses are well-prepared to handle the complexities of operating in foreign markets.

TradeMalta organises trade missions and sets-up national pavilions at international trade shows to facilitate networking opportunities and helps businesses establish key connections with foreign partners, distributors, and customers.

Another TradeMalta’s key offering is market research. TradeMalta helps companies identify potential international markets, understand the competition, and determine demand for their products or services abroad. This ensures that businesses are making informed decisions about their global expansion plans.

What truly sets TradeMalta apart is its dedicated team of professionals. Made up of highly experienced and knowledgeable staff, the team is always ready to assist Malta-based businesses. Whether it’s through personalised consultations or providing on-the-ground support at international events, TradeMalta’s team ensures that companies receive the help they need at every stage of their international journey. Their commitment to service excellence is what makes TradeMalta a trusted partner for Malta-based businesses aiming to reach international markets.

TradeMalta, is a public-private partnership between the Government of Malta, currently under the remit of Ministry for Foreign and European Affairs and Trade and the Malta Chamber of Commerce.

Piloting different opening hours for selected branches

Bank of Valletta has been upgrading the customer experience and the services offered throughout its branch network while piloting new services in some branches in anticipation of further enhancements expected over the next few months. Enhancements include the consolidation of branches into regions for a more tailored focus on geographic service needs, the pairing of branches into main and satellite outlets to offer specialised services, priority cash services to assist the elderly, as well as upgraded queuing systems to ensure better flow of customers within branches.

Other planned changes are being piloted and include different opening hours for selected branches during the week, based on customer preferences. These changes will be piloted from Monday 4th November from the Branches in Gżira, Ibraġ, Msida, San Ġwann, Sliema, Valletta and Gozo Area. Following an approximate six-week period, the Bank will analyse the traction of this pilot, including obtaining feedback from customers and reviewing data from transaction volumes. The enhanced service offering is planned to be offered permanently from all locations at the beginning of the coming year.

Regional Service

With 32 Branches across Malta and Gozo, BOV remains the most physically present Bank in the Maltese community. To better serve customers and offer a more personalised service, branches have been divided into two categories (main and satellite) and spread across 4 regions encompassing the North, South, Central East, and Central West, with Gozo also considered as a separate region district. Main outlets will offer full banking services and will also feature longer hours on Tuesdays and Thursdays, also remaining open on Saturdays. Satellite branches will offer fewer specialised services and will be operating from Monday to Friday. A full list of branches, including opening hours, can be found at https://www.bov.com/find-us.

Cashiering Service

The Bank will retain Priority Cash Service for the elderly, which was introduced in June 2022. The service is part of the Bank’s strategy to continue improving the customer experience in its branch network. The fast-track days are now available every Friday and Saturday from 08:15 to 09:30 from the Main Branches and every Friday during the same time from the Satellite Branches. Cashiering services will be offered from both Main and Satellite Branches and will be available daily until 11:00.

Customer Feedback

These enhancements have been made following feedback from customers, who prefer longer opening hours to match their lifestyle. Other changes are being made following indications that over-the-counter transactions have decreased by an average of 7,000 per month during the first eight months of 2024, compared to the previous year, equivalent to a 25.6% reduction. This is matched by a shift to digital, which registered an average increase of 130,000 monthly digital transactions from January to August compared to the same period in 2023. This important feedback is part of the Bank’s ongoing efforts to match the service offered with the preferences of its customers, striking a bold balance between digital solutions and personalised one-to-one service that some Bank customers prefer.

The 2024 edition of the L-Istrina BOV Piggy Bank Campaign was officially launched by H.E.  Myriam Spiteri Debono, President of Malta and Bank of Valletta CEO Kenneth Farrugia.

The concept of this year’s campaign is to use considerably fewer Piggy Banks while still involving all primary and secondary schools in Malta. The new reusable piggy banks will see the campaign creating much less waste while ensuring environmental awareness. Bank of Valletta takes its ESG commitment very seriously and is ensuring that the material used during this campaign is aesthetically pleasing while it safeguards our environment.

CEO Kenneth Farrugiarecounted that this is the 21^st consecutive year that Bank of Valletta and the Malta Community Chest Fund are organising the L-Istrina BOV Piggy Bank Campaign, and throughout these years, the funds collected by schoolchildren through the campaign and donations by the Bank have exceeded the €3 million mark. Apart from the financial support, Bank of Valletta also supports the MCCF, through the design and creation of the piggy banks, followed by the sorting and counting of coins collected.

“The aim of this campaign, since its inception, has been to raise more awareness about solidarity and helping those in need among the younger generation, besides raising the much-needed funds for the Malta Community Chest Fund to continue in its mission towards improving the quality of life and care of those in need,” concluded Mr Farrugia.

Her Excellency Spiteri Debono stated that, apart from the main aim of collecting funds for those in need, this campaign also helps in forming children’s characters embedding in them the values of generosity and altruism. Addressing the families and the educational mentors of students, the President encouraged them to explain to children the significance of their gesture of help, irrespective of how much they can contribute.

This campaign has been going from strength to strength under the tenure of the last five Presidents. Although the core purpose of the campaign remains the same, year after year this initiative tries to engage more students to create a better sense of community and well-being throughout our islands.

The funds collected through the campaign and a generous donation by Bank of Valletta will be presented during the live broadcast of L-Istrina on 26^th December 2024.