Profit Before Tax of €302.4 million and Gross Dividend Payout of €130.7 million

Bank of Valletta achieved a record performance for financial year 2024, with profit before tax of €302.4 million, representing a growth of 20.2% when compared to FY2023. This was announced during a press conference hosted by BOV Chairperson Dr Gordon Cordina, CEO Kenneth Farrugia and CFO Kevin Cardona. The main highlights can be summarised in the following points:

• Profit before Tax: Profit before tax for FY2024 amounted to €302.4 million, up from €251.6 million in 2023, reflecting a 10.1% increase in operating revenues and contained cost growth.
• Dividend: The Board of Directors will be recommending a final gross dividend of €0.1314 per share, bringing the total dividend for FY2024 to €0.2238 per share, up by 92.5% from the 2023 level; this equates to a distribution of €76.7 million from H2 profits (€49.9 million net). Combined with the interim distribution, the total gross dividend payout amounts to €130.7 million (€84.9 million net).
• Bonus Issue: The Board will also recommend a bonus share issue of one (1) share for every ten (10) shares held. This is subject to regulatory approval.
• Share Buy-Back: The Board will be proposing a share-buyback initiative to increase the liquidity of the Bank’s equity instrument in the market, without cancelling shares. This is subject to regulatory approval.
• Bond Issue: The Board will also be considering a further issuance of Bonds (Tranche 2) out of the Euro Medium Term Bond (EMTB) programme of up to €250 million.
• Balance Sheet Growth: The Bank’s balance sheet expanded to €15 billion (67.1% of GDP, and 107% that of all other domestically oriented institutions taken together), while credit grew by €700 million during the year, with the Bank’s interest rates remaining among the lowest in the euro area.

Performance Highlights

The BOV Group’s performance was driven by a strategic focus on both revenue and cost management. Total operating income for FY2024 amounted to €485.8 million, marking a 10% increase from the previous year. This was driven by the expansion of loan portfolios, improved net fee and commission income, and a sustained treasury activity to continue investing in high quality financial instruments.

Net Interest Income: This increased by 9.6%, reaching €385.9 million, with the Bank expanding its lending activities and proprietary investments and benefitting from improved deposit rates on cash reserves. The growth in Net Interest Income was spearheaded by a dynamic balance sheet optimisation approach undertaken during the last years, where liquid assets were diverted into interest bearing investments with a view of stabilising income over a longer period and reducing volatility.

Net Fee and Commission Income: The BOV Group equally managed to register a 4.3% year on year growth over 2024, as this rose to €81.4 million.

Associates: The Group’s share of profit from insurance associates resulted in a profit of €9.5 million (€11.0 million in 2023).

Costs: Total Costs for the year amounted to €216.7 million which is 2.8% above the previous year. Personnel costs remained the primary cost driver, where the Bank continues to invest in talent followed by technology-related expenses where the Bank continues to invest as part of its strategic drive for digitalisation. The Bank has set out a cost management framework, encompassing a procurement excellence methodology, to ensure that cost levels are optimised over the medium to longer term both on the operational front, and on human resources, where a capacity planning exercise is currently underway.  

Expected Credit Losses: The movement on Expected Credit Losses (‘ECL’) for the year amounted to a net release of €23.8 million (2023: €10.5 million net release), which was influenced by an improvement in both the non-performing and under-performing ratios as well as strengthened collateral position on a number of key non-performing assets. The Group’s unwavering commitment to improve the quality of the portfolio resulted in the non-performing loans ratio to continue heading downwards and closing at 2.68% which is equivalent to a 0.38% below the 3.06% outstanding as at December 2023.

Customer Deposits: BOV Group deposits increased by €651.7 million to €12.8 billion, driven both by non-personal and personal deposits. This was productively deployed in long-term interest-bearing assets with the credit portfolio increasing by more than €700 million and the investments portfolio up by €983.2 million.

Loans and Advances to Customers: Net loans and advances increased by 11.6% to €6.9 billion at end 2024, with the credit portfolio showing consistent growth primarily due to sustained business across all segments including business, home and personal loans, whilst also maintaining a strong focus on credit quality. As a result, the Gross Loan-to-Deposit ratio increased by nearly 3% by year end to 54.5%, and the Group’s liquidity remains well-above the minimum regulatory requirements.