“There is no doubt the next few months are very uncertain and undoubtedly everyone in Malta will be affected in some way,” commented Bank of Valletta CEO Rick Hunkin, appointed to the role in January 2020.

He was commenting in a statement to announce the bank’s financial results for 2019. BOV registered a pre-tax profit of €89.2 million. The bank also noted a pre-tax profit of €138.1 million, before increased litigation provision of €25 million and additional transformation costs of €23.9 million.

2019 was a challenging year for BOV as a result of a de-risking exercise imposed by local and EU regulators, while it also upgraded its core banking systems. 2020 is proving to be challenging for different reasons, chiefly the COVID-19 pandemic, wreaking havoc to economies across the globe.

“The outbreak is expected to have a substantial negative impact on both global and local economies,” commented Mr Hunkin.

He described 2019 as a “pivotal year for the BOV Group, with strong results reported.”

“We successfully delivered the implementation of the new Core Banking System, continued with our de-risking initiatives and strengthened our control functions.

“At the same time, we continued to provide our customers with innovative digital banking services and supported a wide range of businesses across the Maltese economy.”

The CEO acknowledged how currently, all are focused on the “extraordinary challenges brought about by COVID-19.”

“So far at Bank of Valletta, our staff have continued to serve our customers and we have kept all our branches and operations going with their help and commitment. My thanks, as always, go to our loyal and hardworking teams here at BOV.”

Mr Hunkin explained how BOV’s capital buffers, together with measures made available by the regulatory authorities “provide significant mitigation against the additional challenges of this unprecedented event.”

He stressed that “an adverse influence on 2020 performance is highly probable, but a clear determination of the overall financial impact cannot be made at this early stage.”

“There are uncertainties on both the duration of the crisis and the extent of the impact on the local economy as well as the scale and effectiveness of mitigating measures provided by local and EU authorities.”

He remarked that BOV has already taken steps and intends to launch further initiatives to continue to support the local economy, “as well as to help safeguard the well-being of its employees and its customers.”

Shedding light on the strategic priorities for BOV, the bank’s priority remains long-term sustainability, “underpinned by a strengthening capital base”.

He said that for 2020, a focus will be placed on growing the business “in line with the revised Risk Appetite Framework and enhancing the customer experience” by simplifying processes and investing further in digital channels.

“We will also continue to strengthen the internal risk culture through the Risk Transformation Programme and related de-risking activities.”

Retiring BOV chairman Deo Scerri / BOV website

Mr Hunkin referred to Deo Scerri’s decision to withdraw from the Board in order to “focus more on his personal life and family”.

Mr Scerri occupied the role of Chairman, and will be stepping down in May.

“Deo has been a leader of our business for over 7 years and has made a massive contribution to the Bank. On behalf of all staff, I thank him and wish him well for the future. Details regarding his successor will be announced as soon as these become available.”

Mr Hunkin, on behalf of the whole Bank, also paid tribute to the significant contribution of BOV’s ex-CEO Mario Mallia, whose sad and untimely death in February 2020 came as a shock to everyone at Bank of Valletta.

Headline figures for BOV’s financial results are as follows:

• Profit before tax of €89.2 million, a post-tax ROE of 6.2%
• Profit before tax, stated before the increased litigation provision of €25 million and additional transformation costs of €23.9 million, amounts to €138.1million
• Earnings Per Share of 10.9 cents, Shareholders’ equity of €1.1 billion
• Core Equity Tier One ratio increased by 120bps to 19.5%
• A net dividend of 1.71 cents per share is recommended