Bank of Valletta (BOV) has announced its highest-ever profits, with a profit before tax of €302.4 million for the financial year 2024, marking a 20.2 per cent increase over 2023. The results were revealed during a press conference addressed by BOV Chairperson Dr Gordon Cordina, CEO Kenneth Farrugia, and CFO Kevin Cardona.

This performance, which the bank attributes to strategic revenue growth and cost management, includes a proposed gross dividend payout of €130.7 million – almost double that of the previous year.

The profit before tax increased by €50.8 million from the previous year, with operating revenues rising by 10.1 per cent and costs remaining tightly controlled.

The Board of Directors will be recommending a final gross dividend of €0.1314 per share. Together with the interim dividend, the total dividend for FY2024 amounts to €0.2238 per share – a 92.5 per cent increase on the 2023 level. This equates to a gross distribution of €130.7 million (€84.9 million net), with €76.7 million distributed from second-half profits.

The Board also intends to recommend:

• A bonus share issue of one share for every ten held, subject to regulatory approval.
• A share buy-back initiative to increase the liquidity of BOV’s equity instrument without cancelling shares.
• A bond issue (Tranche 2) under the Euro Medium Term Bond (EMTB) programme of up to €250 million.

€15 billion balance sheet and low interest rates

BOV’s balance sheet expanded to €15 billion – representing 67.1 per cent of Malta’s GDP and 107 per cent of all other domestically-oriented institutions combined. Credit grew by €700 million over the year, with the bank maintaining some of the lowest interest rates in the euro area.

Net interest income rose by 9.6 per cent to €385.9 million, supported by balance sheet optimisation and stronger returns on cash reserves. Net fee and commission income also grew, up 4.3 per cent year-on-year to €81.4 million.

Expected credit losses saw a net release of €23.8 million, a significant improvement on 2023’s €10.5 million release. This reflects an improved non-performing loan (NPL) ratio, which dropped from 3.06 per cent to 2.68 per cent, and stronger collateral positions.

Customer deposits increased by €651.7 million, reaching €12.8 billion. These funds were productively deployed into long-term interest-bearing assets, with the credit portfolio rising by more than €700 million and the investments portfolio up by €983.2 million.

Loans and advances to customers increased by 11.6 per cent to €6.9 billion. Growth was consistent across all lending segments, including business, home, and personal loans. The gross loan-to-deposit ratio rose nearly 3 per cent to 54.5 per cent, with liquidity well above regulatory requirements.

Performance metrics

Reflecting on the results, Dr Cordina stated, “Bank of Valletta’s impressive results are the fruit of years of transformation that saw the Bank resolve legacy challenges and exploit new opportunities amid complex external dynamics. We continue to focus on delivering shareholder value, driven by prudent capital management and sustainable initiatives.”

He highlighted the significant dividend payout and bonus share issue as a reward for shareholders and reiterated the Bank’s commitment to sustainability and community engagement. “We have already significantly reduced our carbon emissions and are placing more demands on our clients to drive the green agenda. Our ESG and CSR initiatives will be even more pronounced in 2025.”

CEO Kenneth Farrugia called 2024 “yet another outstanding year of strategic growth and accolades.” He pointed to growth in core credit financing and investments, as well as new opportunities in bancassurance and voluntary occupational schemes through MAPFRE.

He also emphasised BOV’s continued investment in human capital, modernised service channels, process simplification, and strengthened risk controls. “We launched innovative products and services for both personal and business customers and significantly improved our customer service experience, as reflected in monthly surveys.”

Among the key highlights in 2024 were:

• An upgraded credit rating to BBB by Standard & Poor’s.
• A €100 million five per cent unsecured subordinated bond, significantly oversubscribed on its first day.
• BOV being named Company of the Year by the Malta Stock Exchange.
• BOV Fund Services being voted Best Fund Administrator in Malta 2024 by Capital Finance International.

CSR and ESG achievements

Sustainability remains central to BOV’s operations, Mr Farrugia added. This year saw the launch of the BOV Foundation, reflecting the Bank’s roots in the Maltese community.

Notable CSR initiatives included:

• The Rebbiegħa CSR Initiative, which won Gold in the Project Green category at the Malta Business Awards.
• The Bank’s Volunteering Initiative, recognised with a Silver Social Impact Award. Employees contributed by supporting NGOs, planting trees, cleaning up public spaces, and helping vulnerable communities, including children in care and animal shelters.

On the ESG front, BOV introduced a new ‘green’ credit financing product for SMEs to aid Malta’s transition to a sustainable future.

Both Chairperson Dr Cordina and CEO Mr Farrugia concluded by thanking BOV’s employees for their “unwavering commitment, exceptional talent, and relentless efforts,” which were central to the Bank’s record-breaking performance. They also acknowledged the Board’s support and the trust placed in them by customers and shareholders.