The Lombard Bank Group registered a 22 per cent increase in profit before tax to €23.8 million for the financial year ended 31 December 2025, reflecting improved operational performance across both its banking and postal businesses.

Profit before tax at Lombard Bank Malta plc rose to €19.1 million, up from €16.1 million in 2024, while subsidiary MaltaPost plc reported a 37 per cent increase in pre-tax profit to €6.4 million.

The group’s performance was driven largely by continued expansion in lending activity, with loans and advances to customers rising by 6 per cent to €929 million. Gross interest income increased by 5 per cent to €40 million, supported by sustained credit demand.

However, profitability was partly constrained by rising funding costs. Interest expense surged by 28 per cent to €13.9 million, reflecting both higher deposit volumes and more competitive rates on longer-term deposits. As a result, net interest income declined by 4 per cent to €26.1 million.

Customer deposits grew by 8 per cent to €1.2 billion, with a notable shift towards longer-term deposits, which offer greater funding stability but carry higher costs. In fact, the deposits carrying a fixed term of over two years now make up a third (32.9 per cent) of Lombard's total deposits. Meanwhile, net loans and advances to customers increased by 6.5 per cent to €929.1 million.

Operating income increased by 3 per cent to €76.5 million, while costs remained broadly controlled. Employee compensation rose by 7 per cent amid a tight labour market, though overall operating costs increased marginally by 1 per cent.

This allowed the bank to improve its cost efficiency ratio to 52.4 per cent, down from 54.5 per cent in 2024. Net fee and commission income remained stable at €6.4 million.

The group also reported a net release of €1 million in expected credit losses, primarily linked to the recovery of previously impaired exposures.

MaltaPost boosts group performance

MaltaPost continued to be a key contributor to group results, benefiting from growth in parcel volumes driven by e-commerce activity. Postal sales and other revenues rose to €42.6 million, supported by cross-border deliveries and tariff adjustments.

The company also advanced its digital transformation strategy and invested in logistics infrastructure to strengthen last-mile delivery capabilities.

The group maintained a robust financial position, with total assets increasing to €1.5 billion and equity attributable to shareholders rising to €224 million.

Capital and liquidity metrics remained well above regulatory requirements, with a total capital ratio of 19.9 per cent and a liquidity coverage ratio of 380.5 per cent. The loan-to-deposit ratio stood at 79.6 per cent, reflecting a conservative funding structure.

Return on equity improved to 7.1 per cent, while earnings per share increased to €0.10.

Chairman’s comments

Group Chairman Michael Bonello noted that despite previous announcements of 'imminent' changes in banking regulation that would reduce the regulatory burden on smaller banks, "we have not become aware of any developments in this regard."

"We remain hopeful that this new thinking will soon be translated into meaningful action."

The Chairman also referred to the "long-outstanding matter" of the National Development and Social Fund's (NDSF) 49.01 per cent qualifying shareholding in the bank.

The NDSF was a fund established by the Maltese Government and financed with funds funnelled from the sale of citizenship, prior to the closure of the programme following a European Court ruling.

He noted that despite making a commitment, back in 2018, to dispose opf its shareholding, the NDSF has yet to do so.

"Despite our relentless efforts to bring this matter to a conclusion acceptable to both sides, I have to report that this commitment has still not been honoured," he said.

"We reaffirm our belief that disposal of these shares would provide needed clarity to prospective investors and would be in the best interest of all our stakeholders. We are therefore resolved to continue pursuing this objective with the same level of commitment."

Dividend and outlook

The board has recommended a final gross dividend of 3.42 cent per share, subject to shareholder approval at the upcoming Annual General Meeting scheduled for 24 June 2026.

Looking ahead, the group said it will focus on consolidation and sustainable growth, with strategic priorities centred on digital transformation, operational efficiency, and enhanced customer engagement.

The bank is also progressing initiatives including a new core banking system, wealth management platform, and expanded digital channels, aimed at strengthening its competitive position in an evolving financial services landscape.