Bank of Valletta is keen to expand outside Malta, especially as a financial services provider, though expanding on the commercial side may be more difficult as the bank has to watch its balance sheet, the bank’s annual general meeting was told last week.

BOV held its 33rd AGM at the Mediterranean Conference Centre in Valletta.

Bank chairman Roderick Chalmers was replying to a question by shareholder Lino Callus.

Another question came from former Labour minister Freddie Portelli, who asked about the euro and its impact on the bank. Mr Chalmers replied that while the introduction of the euro will affect the bank in the short term, through expenditure on new systems and the loss of foreign exchange dealings, in the long term the euro will be of benefit to the Maltese economy and to the bank.

The shareholders approved the bank’s Profit and Loss Account and Balance Sheet for the year ended 30 September and the Directors’ and Auditors’ Report thereon. A gross dividend of 11 cents per share, which represent a gross payment of Lm12,191,617.02 as recommended by the directors, was approved for payment.

Following the shareholders’ approval, the dividend was processed for payment on Thursday, and will be paid to all shareholders who appeared on the share register as at the close of business on 8 November.

Mr Chalmers highlighted the BOV Group results obtained for the financial year that ended on 30 September. “The BOV Group made a pre tax profit of Lm38.4 million – an increase of 44 per cent over the profits for the previous year,” he said. “In view of these good results, your board feels able to recommend for approval by you, the shareholders, at this meeting a final gross dividend of 11 cents per share. Taken together with the gross interim dividend of 5.5 cents per share paid on 8 May of this year, this makes for a total gross dividend of 16.5 cents per share for FY 2006. This represents an increase of 47 per cent on the total gross dividend of 11.25 cents per share (adjusted for bonus issue) paid for FY 2005,” he added.

The chairman said that the overriding theme to best describe FY2006 was that the results for the year demonstrate the benefits that can be obtained when an institution such as BOV is prepared to embrace change, accept challenges and seek out – and then seize – opportunity. “This process or journey of change to which I refer is not something that happened just this year or last, but is one that your bank set out on several years back – and the results for 2006 are an eloquent testimony to the cumulative benefits obtained, and to the very positive impact on the financial results of the Group, as the various initiatives embarked upon gained traction and gathered momentum,” Mr Chalmers explained.

He had good results to report to the Annual General Meeting. “Shareholders will be glad to hear that good progress has been made on both counts. FY 2006 saw a net increase of Lm150 million or 18 per cent, in our loans and advances, with growth coming from both the business and home loans or mortgage sectors. At the same time, we have seen a continuing improvement in the quality of that book of business,” he said.

Addressing the issue of impaired loans, the chairman said that the number of these has fallen from 9.7 per cent of the loan book at the end of September 2005 to 7.4 per cent as at the end of FY 2006.

The shareholders were then addressed by chief executive officer Tonio Depasquale, who referred to the bank’s achievements throughout the past financial year that had led to the further strengthening of its market position.

Mr Depasquale said that BOV had met and surpassed the ambitious goals it had set for 2006. “The record results achieved by Bank of Valletta have been at the basis of a year of successes and achievements,” he said. He mentioned the positive developments that have marked financial year 2006, including the recent announcement by international credit rating agency FITCH wherein it re-affirmed the bank’s ratings and outlook following the upgrade it granted last year. During the year, BOV was also named Bank of the Year in Malta by The Banker, the monthly banking publication of The Financial Times Group and was voted Best Bank in Malta by the international financial publication Global Finance.

Following a call for applications for directors pursuant to Article 60 of the bank’s Articles of Association, seven valid nominations were received for the six vacancies on the board of directors. Given that one of the candidates, Paul Testaferrata Moroni Viani, had withdrawn his nomination and, consequently, the number of the remaining nominations became equivalent to the number of vacancies then, as contemplated by Article 60.2.4, no election was necessary and the six remaining candidates were automatically appointed directors.

The Board of Directors of Bank of Valletta is therefore composed as follows:

Roderick Chalmers (chairman)

Joseph Borg

Roberto Cassata

James Grech

Marlene Mizzi

George Portanier

Norman Rossignaud

James Vella

George Wells