BOV chairman Joseph F X Zahra attributed this strong performance to the effectiveness of the strategy that the BOV Group has implemented over the past year and to the resilience that underpins the fundamentals of its operations. “BOV is today a modern financial services operator with an organisation structure that is well-aligned to deliver on its key strategic thrusts”, said Mr Zahra.

Elaborating on the financial results, Mr Zahra announced that the BOV Group’s interest income reached Lm40.9 million (2003: Lm34.6 million) an increase of 18.1 per cent. “Net commission income registered an increase of 15.6 per cent from Lm8.5 million in 2003 to Lm9.9 million this year. Operating costs increased by 8.5 per cent from Lm27.1million last year to Lm 29.4 million,” said Mr Zahra.

Despite the increase in costs, the cost income ratio improved from 50.1 per cent in 2003 (restated to include share of

profits from associates) to 48 per cent during the financial year ended 30 September 2004. This represents the strongest cost income ratio registered by the Group since September 1996 and continues to improve on the positive result achieved last year in line with the bank’s efforts to optimise on cost-effectiveness in its

operations.

Provision for impairment allowances increased by Lm13.4 million (2003: Lm12.2 million). This provision includes a final allocation in an exercise that has now been fully carried out by the bank, bringing its impairment allowances in line with standards required by local legislation. Impairment allowances are provisions which the bank prudently sets aside to make good for any potential losses in the future.

The BOV Group preliminary statement of annual results for the financial year ended 30 September 2004 shows sustained balance sheet growth, with group total assets increasing by Lm42.3 million (2.2 per cent) to reach Lm2.03 billion (2003: Lm1.99 billion). Customer deposits increased by Lm30.3 million (2.1 per cent) to reach Lm1.46 billion (2003: Lm1.43 billion). Concurrently, net advances to customers increased by Lm45 million (5.8 per cent) to reach Lm826.1 million (2003: Lm781.1 million).

During the financial year ended 30 September 2004, shareholders’ funds increased by Lm2.8 million (2.2 per cent) and amount to Lm129.8 million (2003: Lm127 million). Group net asset value per share increased from Lm2.29 to Lm 2.34

Mr Zahra announced that the Board of Directors is recommending to the Annual General Meeting of the Company a final gross dividend of 10 cents per share which, together with the gross interim dividend of six cents per share paid in May 2004, results in a gross total dividend of 16 cents per share. This represents a 45.5 per cent increase over the gross dividend per share paid last year.