Bank of Valletta (BOV) has reported a significant turnaround in its financial performance for the first nine months of 2023. The bank, chaired by Dr. Gordon Cordina and led by CEO Kenneth Farrugia, transformed a €48.7 million loss from the same period in 2022 into a pre-tax profit of €163.5 million. This remarkable improvement was primarily driven by a robust net interest income, resilient asset quality, and growth in customer lending and proprietary investment portfolios.
The bank reported a 56% year-on-year increase in operating revenues to €315.9 million. This was largely due to strong net interest income of €253.8 million, primarily from growth in personal and business lending. However, operating costs also rose by 5% to €139.0 million, while Net Expected Credit Losses stood at a net charge of €13.1 million.
BOV's assets decreased by €118.8 million to €14.4 billion at the end of Q3 2023, while the Group’s liquidity ratio increased to 458.5%. Reflecting the bank's strategy to hold securities until maturity, the treasury portfolio grew by €556.8 million (12%). Customer deposits contracted by about 4% since December 2022.
Total Group Equity increased to €1.2 billion, up by €108.5 million since December 2022 restated figures. The Group’s net asset value as at September 30, 2023 amounted to €1.2 billion resulting in €2.1 net asset value per share.
In line with its Strategy 2023 Update, BOV secured correspondent banking services from Citi, one of the leading global banks. This move is part of BOV's focus on business process re-engineering, operational efficiency, and improved customer services.
BOV has been focusing on enhancing its branch experience and introduced flexible work arrangements as part of its initiatives to improve employee satisfaction. Upskilling initiatives have been planned to further enhance productivity.
The bank has benefitted from interest rate increases carried out by the European Central Bank (ECB) since July 2022. These have pushed rates to historically high levels. CEO Kenneth Farrugia commended the bank's performance and highlighted its conscious integration of ESG factors into its business strategy, fostering a sustainable and inclusive banking model.
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