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Bank of Valletta holds 46th Annual General Meeting
26 Nov 2020

Future Proofing Malta’s Largest Bank 

Bank of Valletta held its 46th Annual General Meeting on Thursday 26th November 2020. This AGM was convened remotely in line with current Health Authority recommendations. 

Addressing the shareholders, recently appointed Chairman Dr Gordon Cordina said that besides the need to emerge from the COVID-19 episode in a position of strength, the Bank has embarked on an ambitious programme that will transform the way the Bank does its business to future-proof it for decades to come. ‘This will not be a superficial exercise, but a radical change from the inside out affecting all operations and interactions with internal and external stakeholders ensuring that the Bank continues to be relevant to the Maltese economy, while delivering better returns to its shareholders.’ 

‘The new strategy, dubbed BOV-2023 aims to lift the Bank to a place among the best of its peers in Europe and its design and implementation are being supported by professionals with international-level track records in these processes,’ continued Dr Cordina. ‘This strategy will ultimately target the maximisation of shareholder value in the medium term, with a vision to restore the payment of dividends at levels that are adequate, stable and predictable.’ 

BOV CEO Rick Hunkin proceeded to highlight the Bank’s performance for 2019. The BOV Group reported a profit before tax of €89.2m. Profit attributable to shareholders of €63.5m results in earnings per share of 10.9 cents, compared to 8.8 cents the previous year. Adjusting for an additional contingent liability provision of €25m and additional costs associated with the transformation programme of €23.9m, the underlying profit amounted to €138.1m 

A continuous growth was registered in the Bank’s balance sheet with gross advances to customers being 1.9% higher than 2018 at €4.7 billion. Deposits were also up by 2.1%, which reflected growth from local retail economic activity, thus offsetting substantial reductions in deposits held by international clients. Capital strength was evidenced by an improvement in the CET1 ratio - at the year end this stood at 19.5%, an increase of 120 basis points over last year. 

‘The BOV 2023 strategy is designed to make Bank of Valletta a more resilient and more profitable bank: better, simpler and faster,’ said Mr Hunkin. The three main pillars of this strategy will focus on:

i)      investment in the digitisation of products and services, to make it easier for customers to transact with us;

ii)    the rebalancing of our Balance Sheet where we will guide a segment of our customers to achieve a better balance in their portfolios by helping them to identify alternative investment products that give them better returns than their deposit accounts; and

iii)   to improve customer experience by reforming long and complex processes and updating systems to increase efficiency and support our customers.’ 

‘We have continued to put significant effort and investment into de-risking our portfolio through a new risk appetite framework during 2019 and also 2020 and successfully migrated to the new Core Banking System, a modern IT platform which we will continue to build upon to offer improved electronic services and bespoke products and services to our customers,’ continued the BOV CEO. ‘We have also put a lot of focus and effort into closing out contingent liabilities arising from past legal issues. We very recently closed the Swedish Pension Case with a settlement of €26.5m, a significantly lower settlement than the €88m claimed by the SPA. The historic property fund case was closed in the Bank’s favour in 2019 and we are currently awaiting the legal outcomes of the Deiulemar case.’ 

‘Finally, the Board of Directors’ decision to withdraw its original recommendation to the Annual General Meeting to approve the payment of a final dividend in respect of Financial Year 2019 is based on the ECB’s direct guidance on dividend distribution. Banks have been directly instructed to preserve all capital until such time when the final effects of the pandemic are known. We understand this is not welcome news for shareholders, but we hope you understand this is an unprecedented situation we are all facing,’ concluded Mr Hunkin. 

Five resolutions were put to the meeting and approved. The ordinary resolutions included approval of the Profit and Loss Account and Balance Sheet for the year ended 31 December 2019, the re-appointment of the Bank’s Auditors, the Remuneration Policy for Directors and the BOV Variable Remuneration Share Plan. An extraordinary resolution proposing changes to the Memorandum and Articles of Association was also approved by the Annual General Meeting. 

The Board of Directors received three resignations of Non-Executive Directors, during FY 2019 and during the first quarter of FY 2020.  Following a call of application for nomination of Non-Executive Directors, the Bank received 4 nominations, 2 of which were withdrawn whereas the other 2 candidates were deemed not to be suitable.  No election took place and the 3 vacancies remained vacant.  

Thus, with effect from 26 November 2020, the Board of Directors for Financial Year 2020 shall be composed of the following Directors: 

1. Cordina Gordon (Chairman)
2. Agius Stephen
3. Borg Miguel
4. Bugeja Diane
5. Grech James
6. Hunkin Rick
7. Lupi Alfred
8. Mangion Anita
9.   Mifsud Alfred
10. Piras Antonio

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