Third of personal loans go towards green initiatives – BOV
Bank registers profit before tax of €251.6 million
Green loans now make up a third of all personal loans issued by Bank of Valletta, the bank revealed yesterday, saying that this was a key factor in the bank’s performance throughout 2023.
The bank was presenting its annual results for 2023, in which it registered a profit of €251.6 million before tax. CEO Kenneth Farrugia hailed 2023 as “a record year”, with profits €100 million higher than they were the previous year.
While Farrugia acknowledged that the higher profits are partly down to “the tailwinds of interest rates”, which have risen across Europe, he also attributed the performance to income from the bank’s loan facilities, with growth in green loans particularly prominent.
The bank offers loans for several green initiatives, from the purchase of electric vehicles and photovoltaic panels to the installation of energy-saving insulation and double-glazing.
In total, over €38 million in green loans were handed out last year, a third of the bank’s total personal lending portfolio. This is a threefold increase from the 11% registered the previous year.
The bank also registered more home loans than ever, rising by €217 million in 2023 to reach €2.9 billion.
BOV chair Gordon Cordina said that the year’s results show how the bank had successfully navigated troubled waters in recent years in its quest to “resolve various legacy issues”.
In May 2022, BOV reached an out-ofcourt settlement to pay a staggering €182 million to the bondholders of collapsed shipping giant Deiulemar.
More recently, BOV announced that it had secured a correspondent bank relationship with Citibank, once again giving it access to US dollar clearing services after its last US dollar correspondent bank had cut ties with BOV in 2019.
Asked about the takeup of private pension schemes, the bank admitted that this is still “a challenge”, with relatively slow growth.
“We are in a situation across the country where 90% of people’s wealth is in real estate, 7% in liquidity and 3% in long-term financial investments. We need to rebalance if we want to ensure pension adequacy in the future,” Cordina said.