Friday, April 29, 2016

BOV profits rise, but negative rates cause it sleepless nights

The Bank of Valletta Group has reported a pre-tax profit of €68.5 million for the first half of the year. This compares to a profit of €58.8 million in the same period last year. But despite the positive results, the bank warned that low interest rates were hurting it. "Negative rates imposed by the European Central Bank and other prime banks, as well as negative yields on certain sovereign debt, mean that the bank is being penalised for its high levels of liquidity," said BOV chairman John Cassar White. Pre-tax return on average equity is of 19.9 per cent per annum (2015: 18.4 per cent), while pre-tax return on average assets amounts to 1.4 per cent per annum (2015: 1.3 per cent). The group generated operating income of €134.5 million, up by 12.5 per cent over the corresponding period last year. Operating costs amounted to €58.4 million, a growth of seven per cent. The cost-to-income ratio is of 43.3 per cent, compared to 41.8 per cent last September. Growth in income was driven by investment services, including stockbroking, bancassurance and wealth management services, as well as credit card transactions. Growth in costs is mainly attributable to higher HR costs following...

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