Bank of Valletta achieved a record performance for financial year 2024, with profit before tax of €302.4 million, representing a growth of 20.2% when compared to FY2023. This was announced during a press conference hosted by BOV Chairperson Dr Gordon Cordina, CEO Kenneth Farrugia and CFO Kevin Cardona. The main highlights can be summarised in the following points:

	FY 2024	FY 2023	Change
Profit Before Tax	€ 302.4 m	€ 251.6 m	+ € 50.8 m
Proposed Gross Dividend	€ 130.7 m	€ 67.8 m	+ € 62.9 m
Proposed Gross Dividend per Share	€ 0.2238	€ 0.1162	+ € 0.1076
Proposed Payout Ratio	42.6%	26.3%	+ 16.3%

Performance Highlights

The BOV Group’s performance was driven by a strategic focus on both revenue and cost management. Total operating income for FY2024 amounted to €485.8 million, marking a 10% increase from the previous year. This was driven by the expansion of loan portfolios, improved net fee and commission income, and a sustained treasury activity to continue investing in high quality financial instruments.

Net Interest Income: This increased by 9.6%, reaching €385.9 million, with the Bank expanding its lending activities and proprietary investments and benefitting from improved deposit rates on cash reserves. The growth in Net Interest Income was spearheaded by a dynamic balance sheet optimisation approach undertaken during the last years, where liquid assets were diverted into interest bearing investments with a view of stabilising income over a longer period and reducing volatility.

Net Fee and Commission Income: The BOV Group equally managed to register a 4.3% year on year growth over 2024, as this rose to €81.4 million.

Associates: The Group’s share of profit from insurance associates resulted in a profit of €9.5 million (€11.0 million in 2023).

Costs: Total Costs for the year amounted to €216.7 million which is 2.8% above the previous year. Personnel costs remained the primary cost driver, where the Bank continues to invest in talent followed by technology-related expenses where the Bank continues to invest as part of its strategic drive for digitalisation. The Bank has set out a cost management framework, encompassing a procurement excellence methodology, to ensure that cost levels are optimised over the medium to longer term both on the operational front, and on human resources, where a capacity planning exercise is currently underway.

Expected Credit Losses: The movement on Expected Credit Losses (‘ECL’) for the year amounted to a net release of €23.8 million (2023: €10.5 million net release), which was influenced by an improvement in both the non-performing and under-performing ratios as well as strengthened collateral position on a number of key non-performing assets. The Group’s unwavering commitment to improve the quality of the portfolio resulted in the non-performing loans ratio to continue heading downwards and closing at 2.68% which is equivalent to a 0.38% below the 3.06% outstanding as at December 2023.

Customer Deposits: BOV Group deposits increased by €651.7 million to €12.8 billion, driven both by non-personal and personal deposits. This was productively deployed in long-term interest-bearing assets with the credit portfolio increasing by more than €700 million and the investments portfolio up by €983.2 million.

Loans and Advances to Customers: Net loans and advances increased by 11.6% to €6.9 billion at end 2024, with the credit portfolio showing consistent growth primarily due to sustained business across all segments including business, home and personal loans, whilst also maintaining a strong focus on credit quality. As a result, the Gross Loan-to-Deposit ratio increased by nearly 3% by year end to 54.5%, and the Group’s liquidity remains well-above the minimum regulatory requirements.

Key Financial and Regulatory Ratios

	FY 2024	FY 2023	Change
Return on average equity ratio	22.6%	21.1%	+ 1.5%
Earnings per share	34.2 euro cents	28.8 euro cents	+ 5.4 euro cents
Net asset value per share	€2.41 per share	€2.17 per share	+ €0.24 per share
CET 1 Ratio	22.31%	22.66%	- 0.35%
Total capital ratios	27.13%	25.94%	+ 1.19%

BOV’s impressive results are the fruit of years of transformation - Dr Gordon Cordina

Dr Gordon Cordina reflected on the results achieved by the BOV Group in 2024 as it celebrated 50 years of service to the community and the Maltese economy. “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 on the regulatory, financial, economic and technological fronts. We continue to focus our efforts on delivering shareholder value, driven by prudent capital management as well as strategic and sustainable initiatives. The dividend we are announcing today, which is by far one of the strongest dividend payouts ever, as well as the bonus share issue, which is subject to regulatory approval, are a just reward to our trusted shareholders and reflects our dedication to maintaining a secure and profitable institution.

In the coming months, the Bank will also continue to focus on community and environmental issues. We have already made important strides in this regard, both in the way we operate by significantly reducing our carbon emissions, and by being more demanding on our customers to drive the green agenda. Our ESG and CSR initiatives will become even more pronounced in 2025 and will lead us on the sustainable path we have embarked upon.”

2024 was yet another outstanding year for the Bank - CEO Kenneth Farrugia

CEO Kenneth Farrugia echoed Dr Cordina’s comments on the BOV Group’s robust financial performance. “Building on the record performance achieved in 2023, I am pleased to announce that 2024 was yet another outstanding year of strategic growth and accolades for the Bank as we continue taking forward various key strategic initiatives carried in our Strategic Plan for 2024-2026. Our elevated customer focus, drive to deliver operational efficiency and the dynamic management of risks associated with our operations have all led to improvements in profitability across key business and operational segments. Notable growth was registered in the core credit financing and investments lines of business. The Bank will be pursuing further growth through new opportunities in bancassurance and voluntary occupational schemes, leveraging on the strong partnership with MAPFRE.

This year we continued to invest in our human capital and have implemented various initiatives to support the wellbeing of our employees. These actions have contributed to support our business and operational projects which centred on modernising our service channels, simplifying processes for better efficiency and strengthening risk controls. Over the course of this year, we also continued to strengthen our customer service experience as evidenced by the surveys carried out every month and also launched innovative products and services to our esteemed personal and business customers.

Standard & Poor’s Global Ratings recognised the Bank's various initiatives and results achieved so far by raising the Bank’s credit rating to BBB. Another notable achievement in 2024 was the launch of the €100 million 5% unsecured subordinated bond, which was significantly oversubscribed on the first day of its launch, reflecting the trust and confidence placed in the Bank by the public and local and foreign institutions. At the end of 2024, the Bank was also awarded 'Company of the Year' by the Malta Stock Exchange as a reflection of the Bank’s achievements, and BOV Fund Services was voted as Best Fund Administrator in Malta 2024 by Capital Finance International reflecting our focus on service excellence.”

Corporate Social Responsibility and ESG

Mr Farrugia went on to say that “Sustainability remains firmly embedded in both our business and operational model. During this year, the Bank launched the BOV Foundation, reflecting the importance that we attribute to the Bank’s deep roots in many aspects of Maltese society where the communities that we operate in remain important stakeholders for us.

Our drive in this area culminated with the launch of the Rebbiegħa CSR Initiative, which secured Gold under the Project Green category during the Malta Business Awards. This initiative highlights BOV’s leadership as an active citizen in promoting sustainability. Our activities in support of our communities continued unabated and were equally recognised with the Silver Social Impact Award during the Awards event following the launch of BOV’s Volunteering Initiative. Since its launch, Bank employees supported various NGOs by participating in tree planting, clean-ups, and activities supporting vulnerable groups, including assisting children in care and animal shelters. On the ESG front, the Bank launched an innovative ‘green’ credit financing product for SMEs to support the country’s transition to a more sustainable future.”Both the Chairperson and CEO underscored the paramount importance of the Bank’s dedicated employees in achieving these record financial results. They praised the unwavering commitment, exceptional talent, and relentless efforts of the entire team, which has been instrumental in driving the Bank’s success. The Board of Directors' ongoing guidance and support, combined with the strong loyalty and trust of the Bank’s esteemed customers, were also recognised as pivotal factors in this remarkable performance.