Bank of Valletta held its 34th annual general meeting in the Grand Masters’ Suite of the Hilton Malta, St Julians.

The bank’s chairman, Roderick Chalmers, and CEO Tonio Depasquale, addressed the shareholders.

Mr Chalmers said that for the financial year, which closed on 30 September, the BOV Group made a pre tax profit of Lm43.7 million (e101.8m) – an increase of 14 per cent over the profits for the previous year. “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 13.5 cents per share. Taken together with the gross interim dividend of 6.75 cents per share paid in May of this year, this makes for a total gross dividend of 20.25cents per share for FY 2007,” said Mr Chalmers.

This total dividend (paid and proposed) for FY 2007 represents an increase of 22.7 per cent on the total gross dividend of 16.50 cents per share paid for Financial Year (FY) 2007.

The chairman said that Financial Year 2007 was characterized by four dominant themes – (i) the sustained improvement in the performance of the Credit Division and the quality of its loan book, (ii) the continuing growth in customer deposits and BOV’s strength in this sector, (iii) the volatile environment in which the bank’s FM+I business has operated, and (iv) the scale of the bank-wide preparations for the adoption of the euro.

“The progress made by our Credit Division, which I reported on last year has been sustained through FY 2007. During the year we have seen a growth of 12.5 per cent in our loan book, and a continuing improvement in the quality of that business,” said Mr Chalmers. “Impaired lending as a percentage of our total book had decreased from 7.4 per cent as at September 2006 to 4.8 per cent at year’s end, extending the positive trend commenced in 2003.

“I am glad to be able to say that Bank of Valletta continues to be the bank of first choice for the Maltese public in terms of Customer’s Deposits.”

Mr Chalmers announced that total deposits increased by Lm174 million (or over 10 per cent) from September 2006, to reach Lm1,848 million as at year’s end, with strong growth registered in retail demand for both Lm and foreign currency deposits.

Referring to the extreme conditions prevailing in the international credit markets during the last quarter of FY 2007, Mr Chalmers said the relative size of the Financial Year 2007 mark downs reported by BOV equate to less than 0.5 per cent of the funds that the bank’s Financial Markets and Investments (FM+I) Division has under management. “This is a positive tribute to the manner in which FM+I had positioned its portfolio. Furthermore, given our strong liquidity position, we would expect the recent turmoil, although painful in terms of the immediate impact of the markdown on FY 2007 earnings, will be beneficial to earnings in the medium to long term,” said Mr Chalmers. He cautioned that sentiment remains fragile and the markets continue to display bouts of considerable volatility.

Mr Chalmers said that the adoption of the euro as Malta’s currency is now a reality – one for which BOV has been preparing for over the past two years.

“e-Day is almost upon us and we are working closely with the National Euro Changeover Committee, the Malta Bankers’Association, the Central Bank of Malta, and the Malta Financial Services Authority to ensure a successful transition and to provide our customers with as seamless a service as possible.

“As the National Partner Bank of the National Euro Changeover Committee, BOV is playing a special role in ensuring a smooth and efficient transition for the benefit of the general public,” he said.

“It would be wrong to underestimate the magnitude of the effort and investment that has gone into preparing for the euro, and to ensuring the process will be a success. Extensive training of staff has been essential – and we have been involved in a massive public information campaign. Cash management is one of the key challenges of any currency changeover, and over the next few weeks we will be handling huge amounts of notes and coin. The physical and security challenges have been formidable, and we ask shareholders and the general public to be appreciative of the huge logistical exercise in which the banks will be involved, and to approach the transition with patience, understanding and goodwill,” he added.

Mr Chalmers said that, looking forward, the fundamentals for the bank’s business remain strong, both from an operational and a balance sheet perspective. “Shareholders can rest assured that the Board, management and the entire BOV team are looking forward to the future with confidence, and that we are all working very hard to ensure that the Group will continue to report strong financial results, on enhancing our client base, and on widening our services and product lines,” concluded Mr Chalmers.

Mr Depasquale then gave a detailed presentation on the bank’s performance and spoke about some of BOV’s strategic priorities.

BOV’s CEO said that the financial performance of the Bank of Valletta Group has to be analysed within the wider context of a Maltese economy that is performing well. Latest statistics show accelerating real growth in GDP coupled with record employment figures.

Looking ahead, Mr Depasquale said that the solid foundations and strong fundamentals that underpin BOV’s business enable the bank to look ahead with confidence. In the coming period, the BOV Group will continue to deliver on its brand promise, built on an unconditional commitment to a consistent and excellent customer experience based on the principles of supportiveness and mutuality. “We will continue to develop innovative products, taking advantage of the new environment which joining the euro area will usher in, allowing us to offer financial solutions which were not possible hitherto,” said Mr Depasquale. He added that as a key player in the local financial sector, the Group is well positioned to participate in, and contribute to, the ongoing development of Malta as an international financial centre.

Following the chairman’s and the CEO’s address, a total of 10 resolutions were put to the meeting. Among others, the shareholders approved the bank’s Profit and Loss Account and Balance Sheet for the year ended 30 September 2007 and the directors’ and auditors’ report thereon. A gross final dividend of Lm0.1350 (e0.31447) per share, which represents a gross payment of Lm14,962,439 (e34,853,108) as recommended by the Directors, was approved for payment on 20 December. The meeting reappointed Deloitte & Touché Malta jointly with Deloitte & Touché United Kingdom, as Auditors and authorized the Board of Directors to fix their remuneration.

Voting on an ordinary resolution considered as special business, the shareholders approved that, pursuant to the requirements of Article 67.1 of the Articles of Association, the aggregate annual emoluments paid to the directors of the company shall not exceed the sum of Lm96,600 (e225,000).

In another special business ordinary resolution, the shareholders approved that, with effect from Tuesday 15 January 2008, the “Prescribed Period” as defined in article 3.3.4 (a) of the Articles of Association is renewed for another five years to expire on 17 December 2012, and that the “Prescribed Amount” as defined in article 3.3.4 (b) for this renewed prescribed period shall be e50,000,000 (Lm21,465,000).

Another four extraordinary resolutions were put to the meeting, which approved, among others, changes and increases to the bank’s share capital and granted the power to the bank’s Board to consider and, if considered appropriate, to buy back, up to 10 per cent of the bank’s shares. Commenting on this latter resolution, the chairman said that there may be circumstances where it would be in the best interests of the company and its shareholders for the bank to be in a position to be able to buy back some of its own shares, if the terms and conditions so warrant.

At the end of the meeting Mr Chalmers informed the shareholders that the government, by its letter of 14 November 2007 addressed to the company, appointed two directors pursuant to Article 60, namely, himself as director and chairman and James Grech as director. UniCredito appointed Roberto Cassata as director.

Following an election held after the annual general meeting, the new Board of Directors of Bank of Valletta is composed of the following:

Roderick Chalmers (chairman), Roberto Cassata, James Grech, Joseph Borg, George Portanier, Norman Rossignaud, Paul Testaferrata Moroni Viani, George Wells and Franco Xuereb.