The Board of Directors of Bank of Valletta (BOV) met this week to consider whether to issue an interim dividend to shareholders, and have subsequently announced that they will be issuing one early next year – for the first time since the start of the pandemic.

The dividend will be paid on 28th January 2022, and will amount to €0.0264 gross per share (€0.01716 net of tax), subject to regulatory approval.

This figure is in line with that which was due to be paid for the financial year ending 31st December 2019, but which was suspended after the onset of the COVID pandemic and a recommendation by the European Central Bank to not pay dividends or buy back shares during the pandemic.

The ECB made this recommendation to allow banks to boost their capacity to absorb losses and support lending to households, small businesses and corporates during the COVID pandemic.

BOV has, however, since the start of the pandemic recorded a strengthening economic outlook, staging a revival in profitability during the first half of this year, although this remained below its longer-term potential, according to Chairman Gordon Cordina.

Speaking at the release of these interim results earlier this year, Dr Cordina insisted that a return to a “stable and predictable dividend” was not advisable at the time, given the risks in the overall economic environment, the litigation risks facing the bank, and the need for capital to support the bank’s ongoing transformation strategy over the coming months.

“The board will be actively reviewing its dividend policy later in the year as results are crystallised, the strength of our capital to meet future risks is better ascertained, and in line with the recommendations of our regulators,” he said at the time.