Lombard Bank Malta announced a profit before tax of Lm3.87 million for the year ended 31 December 2006, an improvement of 5.5 per cent over 2005.

Net interest income rose by 10 per cent driven largely by growth of 14.4 per cent in credit activity as well as continued effective Treasury management. Higher Customer Deposits and increases in the Central Bank Intervention Rate brought about a higher interest expense.

Net fees and commission income increased by 10.5 per cent as a result of the growth in general volumes of business during the year.

Administrative expenses at Lm2.05 million continue to emphasise the bank’s efforts to contain costs. Even though the bank does not benefit from economies of scale it still registered a very satisfactory Cost to Income Ratio of 35.1 per cent.

The net increase in Impairment Allowances of Lm122,000 reflects the bank’s determination to apply a prudent policy with regard to the management of its credit portfolio.

Shareholders’ Funds increased by 14.9 per cent resulting in Earnings per Share of 29.5 cents (2005: 28.3 cents). Total Assets increased by 9.5 per cent to Lm206 million (2005: Lm188 million).

The Board of Directors is proposing a final gross dividend of 12c5 per share for approval by the general meeting. This represents a 25 per cent increase over last year’s dividend, when taking into account the share split in May 2006.

The board will also recommend that shareholders be given the option of receiving their dividend either in cash or by the issue of new shares. Consistent with the bank’s policy, the attribution price (at which the new shares to be issued will be determined) has been established as the Trade Weighted Average Price of the bank’s shares for the three months up to and including 8 March 2007. Once approved by the annual general meeting, the dividend will be paid to all shareholders who are registered members on 23 March.

The Board of Directors is satisfied that another record profit was achieved for 2006. The robust fundamentals of Lombard Bank together with the loyalty of its customers and the commitment of its staff continue to present favourable prospects for growth.