9 - 11 November 2000

Lombard Bank posts record Lm1.24m profit

Lombard Bank Malta plc has posted a record pre-tax profit of Lm1.24m, an increase of 41 per cent over 1999.
The bank’s audited financial statements for the financial year ended 30 September 2000 have been approved by its board of directors.
Net interest income, increased by 30 per cent, corresponded by increases of 38 per cent in interest receivable against 42 per cent in interest payable. These results reflect an expansion in both the lending and deposit bases.
The bank’s net interest margin of 31.5 per cent continues to hold strongly, despite the tight conditions in both domestic lending and international money markets. Fees and commissions receivable increased by 18 per cent.
Whereas dealing profits on foreign exchange improved only slightly, favourable market movements in the bank’s trading portfolio of equity investments contributed to a six per cent growth in dealing profits from this source, half of which had been realised by the end of the financial year.
Total operating income increased by 21 per cent. Earnings per share – affected by the dilution from the increase in issued share capital – work out at 22c6, up 20 per cent over 1999.
While the eight per cent increase in depreciation continues to be driven by the heavy investment in new banking technology of recent years, administrative expenses remained largely unchanged. Efficiencies were registered in most cost headings, although provisions for salary increases are outweighed by a reduction in staff number during the year under review.
The bank has registered strong performances in its profitability and cost/income ratios. Consistent with its prudent provisioning policy, loan provisions increased in line with a 20 per cent growth in the loan portfolio, which is now at Lm41m.
Shareholders’ funds were significantly enhanced during the year following a one for four rights offer in February. As a result, own funds doubled to almost Lm9m.
Other balance sheet headings showed consistent growth. Customer deposits are up 31 per cent to Lm109m, money market investments by 54 per cent and debt securities by 11 per cent. Total assets at Lm123m are significantly up by 35 per cent over the previous year.
The board of directors is proposing a gross dividend of 8c5 per share (1999 – 7c7) for approval by the annual general meeting, an increase of 10 per cent. The board is also recommending that shareholders be given the option of receiving the dividend either in cash or by the issue of new shares.
The attribution price (at which the new shares to be issued will be determined) will be either the market price as at close of trading on Monday, or the trade weighted average price for the bank’s shares for the three months up to and including that trade, whichever is the lower.