Lombard Bank Malta plc : Financial Results for the period ended 30 June 2022
Company Notice
The following is a Company Notice issued by Lombard Bank Malta plc in accordance with the Capital Markets Rules of the Malta Financial Services Authority.
Quotation
During a meeting held on 12 August 2022, the Board of Directors of Lombard Bank Malta plc (the ‘Bank’) approved the attached condensed interim financial statements of the Group and the Bank for the period of ‘ six months starting from 1 January 2022 to 30 June 2022.
These financial statements have been reviewed by PricewaterhouseCoopers in accordance with ISRE 2410 – ‘Review of Interim Financial Information Made by the Entity’s Independent Auditor’ and they are, together with the attached Directors’ Report for the period ending 30 June 2022, also available on the Bank’s website at https://www.lombardmalta.com/en/financial-results.
Unquote
Helena Said
Company Secretary
12 August 2022
12 August 2022
LOMBARD BANK MALTA plc
HALF YEAR RESULTS FOR 2022
- Group Profit Before Tax was €17.2m (S1 2021: €5.4m).
- Profit Attributable to Equity Holders was €10.9m (S1 2021: €3.2m).
- Operating Income of the Group was €28.6m (S1 2021: €32.7m).
- Bank The Cost to Income Ratio was 57.9% (H1 2021: 60.2%).
- Customer Deposits were €1,009.6m (FYE 2021: €977.1m).
- Loans and Advances to Customers reached €704.8m (FYE 2021: €642.9m).
- The Group’s Total Assets were €1,209.7m (FYE 2021: €1,175.4m).
- The Ratio of Bank Advances to Deposits was 69.7% (FYE 2021: 65.7%).
Directors’ Report
The Lombard Bank Group (the Group) recorded a Profit before Tax of €17.2m, on 1 2022, from €5.4m for the same period last year, while the Bank’s Profit before Tax it was €18.3m, an increase from €4.0m in H1 2021.
These results include a significant recovery on long-term outstanding non-performing loans net of dues for higher regulatory contributions to the Depositors’ Compensation Scheme, as well as lower profits at MaltaPost plc for the first half of its financial year .
As the impact of the COVID19 pandemic subsided in the first six months of the year, business momentum picked up satisfactorily.
Loans and Advances to Clients rose to €704.8m which led to an increase in interest receivable of 3%, while deposits also increased by 3%. This resulted in an improved Net Interest Income of €10.1m.
Fee and Commission Income followed the trend increasing by 19% as a result of higher activity in most business lines.
Group Employee Compensation and Benefits increased by 1% in a continued difficult labor market exacerbated by tight competition or talent and pressure to pay and retain appropriately qualified staff. The operating costs of the group remained under control although those associated with obligations to fulfill the regulatory requirements and to further strengthen the internal control functions, continued to increase. A higher due was charged in line with the Depositors’ Compensation Scheme legislation, which was enacted in the first half of this financial year.
Expected Credit Loss (ECL) as defined and determined by the International Financial Reporting Standard 9 (IFRS9) resulted in a release of €12.1m in the first half of this year compared to a payment of €0.9m taken in the corresponding period of the previous year. This was mainly attributable to a significant recovery on non-performing commercial loans that had been largely provisioned in previous years. The Bank will continue to closely monitor its exposures while also taking into account the global uncertainty not least the geopolitical crisis, economic conditions and the increasing inflationary pressures.
The increase in market interest rates during the 2nd had a mixed impact on the Bank’s investments and resulted in a reduction in the book value of €16.1m. However, it should be noted that the related reduction is not realized as these investments are intended to be held until maturity.
With capital and liquidity ratios within regulatory requirements, our Advances to Deposits Ratio was 69.7% (FYE 2021: 65.7%), indicative of a strong liquidity buffer, as the Bank continues to rely on a diversified funding base, which over the years has proven to be stable.
During this half year we continued to experience consistent demand for general banking services. In commercial and retail credit, such demand remains strong, as we receive proposals for the financing of bankable projects. This encourages us to consider initiatives to increase capacity in order to pursue our strategic priorities. Such initiatives
it should also include access to capital markets. Further announcements in this regard will follow in due course.
While we continue to invest in providing services through digital channels, we also believe that the Maltese public in general still greatly appreciates the physical presence and proximity of a bank in their community. In this regard, our plans remain to selectively and gradually continue to expand our branch network to a level that facilitates physical access around the Islands. As an indigenous credit institution fully committed to supporting the community and the local economy, we believe that the Maltese market will benefit from our wider physical presence.
In more than 60 years of its operation in Malta, Lombard Bank has gained a deep and thorough appreciation and knowledge of the local market. We have well-established relationships in most sectors of the Maltese economy that we are determined to continue to serve and, indeed, to extend. The Bank is confident that there remain ample opportunities for growth in the traditional banking sector, as long as the drivers of such growth remain aligned with the needs of the local economy.
Lombard’s approach to business is one of steady, steady, albeit unhurried growth, while remaining sensitive to local business needs and social realities. Effectively this should give rise to the expansion of our activities across the board while also strengthening the Lombard brand, which generally represents a reputable provider of personalized banking services.
Moving forward, we are therefore confident that due to our sound fundamentals, simple time-tested business model and a good team of staff members, we will achieve our objectives effectively and this for the benefit of all interested parties.
Lombard Bank Malta plc
Condensed Interim Financial Reports 30 June 2022
This is an excerpt from the original content. To continue reading it, access the original document here.