Bank of Valletta is planning a new bond issue for the second quarter of the current financial year, the bank said in its interim statement published on Friday.

The timing of the bond issue, the bank said, is aimed at coinciding with the redemption of its current unsubordinated bond issue, the redemption of which is due on 15 March. As such, the new issue is being aimed at providing current BOV bond holders with an opportunity to reinvest their redemption proceeds in a fresh issue.

The move is also in line with the bank’s previously announced intention for longer term to become a more regular feature in the bank’s funding policy.

Overall, the bank described the performance of its operating profit margin as “satisfactory”.

“Some improvement,” it explained, “has been seen in the net interest margin as deposits have continued to re-price, and commission and trading income has been ahead of expectations.”

In the meantime, the bank reports that fair value movements in its financial markets portfolio have been marginal.

“As anticipated,” the interim statement explains, “the current difficult economic environment has been reflected in an increased impairment charge. However, overall credit quality remains sound. Operating expenses remain under tight control.”

The bank also observes it is apparent from the prospectus issued by Middlesea Insurance and the following company announcement that “the performance of our associated company investment will once again involve a negative charge to the consolidated income statement of the Bank of Valletta Group for the current financial year”.

Reviewing the first quarter of the current financial year, the bank says it has experienced a sustained and encouraging growth in customers’ deposits and that the bank has continued to provide credit to the economy “in a responsible manner”.

It adds that the bank’s “deliberately prudent funding, asset quality, liquidity and capital ratio policies have also been maintained”.