-        declares interim dividend of €0.039 per share

The Bank of Valletta Group has announced a pre-tax profit of €58.8m for the first six months of the financial year 2015 (FY 2015). This represents an increase of €8m (16%) over profit registered during the same period last year. The core operating profit, which is stated before fair value movements and share of profit from associates, stood at €42.9m (FY14: €40.6m). These financial statements have been reviewed by KPMG Malta.

The Board has declared a gross interim dividend of €0.039 per share, which is equivalent to last year's interim dividend when the latter is restated for the bonus share issue of January 2015. The dividend will be paid on 27 May to shareholders on the bank's register of members at the close of business on 12 May.

The highlights of the results are:

-   Interest margin amounts to €71.1m. This represents a 15% improvement over last year, mainly attributable to higher deposit volumes and a continuing shift towards shorter term deposits.

-   Net commission and trading income continued to improve across all the bank's product lines, registering a year-on-year increase of 14% to yield gains of €40.3m. Bancassurance, credit card business, investment related services and foreign exchange business were the main contributors towards this result.

-   The Group's share of profits from its associated companies, MSV Life and Middlesea Insurance, amount to €7.8m (FY14: €5.4m). 

-   Operating expense for the first six months of the FY 2015 amounts to €54.6m, an increase of 17% over the same period last year. This increase in costs is partly attributed to higher regulatory costs.

-  Total assets as at 31 March stood at €9bn (Sep 14: €8.3bn), while equity attributable to shareholders of the bank increased by 4% and amounts to €640.9m.

-        Net advances increased by €122m (or 3%) over the past six months to €4bn. Growth was registered across all segments; however home loans remained the main growth driver.  

-        During the first six months of FY 2015, the bank continued to witness an increase in customer deposits which now stand at €7.8bn. This increase was evident across both the retail and the business segments.

Commenting on the results, Group chairman John Cassar White spoke of the challenges which the bank had faced over the last six months. These included high levels of liquidity which, in combination with historically low yields, exerted pressure on margins. Political and social tensions in the Mediterranean area also had their impact. Moreover, local competition intensified over a number of business lines.

The bank is seeking to overcome these and future challenges through a multifaceted strategy which includes the transformation of business processes, driven by a change of the core IT systems. The aim is to enable a higher quality and more effective customer service, greater flexibility in product design and seamless interaction across delivery channels.

Concurrently, the bank will seek to strengthen its balance sheet by raising capital levels and introducing reforms to improve the quality of the loan book. The chairman described these initiatives as the cornerstones of the bank's strategy over the next five years.

Mr Cassar White concluded by thanking all the bank's customers for their continuing trust and all members of the staff for their commitment and support.