News Lombard Bank Group registered a record Profit before tax
The board of directors of Lombard Bank Malta plc has approved the audited financial statements for the financial year ended 31 December 2019 and resolved that these statements be submitted for approval at the forthcoming Annual General Meeting.
The board of directors further resolved to recommend that the AGM approves the payment of a final gross dividend of 7 cents (net dividend of 4.55 cents) per nominal €0.25 share.
In view of the current circumstances arising from the Covid-19 pandemic, including the restrictions on mass events, the board of directors has decided to postpone the bank’s AGM which was previously scheduled for 23 April, to a later date which shall be notified to the market once confirmed.
The record date (that is, 30 days immediately preceding the rescheduled AGM date) and the dividend distribution date shall be likewise communicated.
The bank advises that it is closely monitoring the situation resulting from the current unprecedented events and the effects which these may have on the bank’s stakeholders, its operations and performance.
The cooperation and support of the bank’s shareholders, customers and staff members during these uncertain times is greatly appreciated.
Summary of Financial Performance
• Group Profit before tax increased by 11.1%
to €15.3m
• Profit attributable to equity holders of the bank was €9.3m or 10.3% above that in the previous year.
• Bank cost efficiency ratio improved to
47.1% (Group: 73.5%).
• Net loans & Advances to customers rose by
8% to €552m
• Customer deposits reached €865m, an in
crease of 9.8%, over the previous year
• Group post tax return on Equity for 2019
was 8.2%
• Group total assets rose to €1,042.3m
(€950.1m in 2018)
• Total capital ratio at 16% exceeded the minimum regulatory requirements
The Lombard Bank Group registered a record Profit before tax of €15.3m for the financial year ended 31 December 2019, an increase of 11.1% over the previous year. This performance was achieved within a context of prudent business practices despite uncertainty that weighed on business sentiment and persistent low interest rates.
Net interest income reached €19.7m, 12.4% above the previous year, driven by increased credit activity serving the needs of the local economy which remained buoyant during 2019. Net interest income was also impacted by judicious treasury management aimed to minimise the impact of negative interest rates coupled with repricing of liabilities at finer interest rates.
The overdue review of certain postal tariffs which was authorised by the Malta Communications Authority helped MaltaPost partly offset the additional costs incurred as a result of the year-on-year shrinkage in letter mail volumes.
Notwithstanding this, growth was registered in other lines of activity, including international parcels. Group Employee compensation and benefits rose by 11% to reach €23m, mainly a reflection of the competitive labour market during 2019.
Within the context of increased Loans and advances to customers, the charge in Expected Credit Losses amounted to €0.55m. This reflects the high quality of the bank’s financial assets as well as adequate levels of collateral cover.
Consequent upon the focus that regulators place upon strict observance to repayment agreements by borrowers, the bank remained determined on resolving those situations where repayments by borrowing customers were in arrears by 90 days or more and which are referred to as “Non-performing exposures”.
The bank remained judicious in managing its liquidity, mindful of the adverse impact of negative interest rates.
Group Total assets as at 31 December 2019 rose to €1,042.3m (2018: €950.1m). Equity attributable to equity holders of the bank grew by a further 10% to €119.1m. Group Net asset value per share stood at €2.70 (2018: €2.45). Group Earnings per share increased by 2 cents to 21.1 cents while Group post tax Return on Equity was 8.2%.
Total Capital Ratio stood at 16%, while excess funds continued to be placed only with reputable counterparty banks and in Malta Government securities. The bank held no exposure to foreign sovereign or corporate bonds.
This positive set of results instils in us the necessary confidence to realise our strategic priorities, namely:
1. Further strengthening the bank’s Governance, Risk and Compliance functions, always aligned to regulatory expectations. 2. Maintaining sound asset quality in line
with our prudent risk appetite. 3. Developing our new business lines, for these to become relevant revenue contributors.
4. Widening physical representation for
growing our relationship base.
5. While acknowledging the vital role of digital solutions, we equally understand that customers value our personalised service which remains a hallmark of Lombard Bank.
6. Continue providing the right work environment and the necessary conditions for our staff so as to ensure job satisfaction and retention.
Going forward we expect to be well positioned to successfully pursue these priorities, which should result in the further enhancement of stakeholder value.