Issue link: https://maltatoday.uberflip.com/i/1094338
BUSINESS maltatoday | WEDNESDAY • 20 MARCH 2019 12 BANK of Valletta Group has announced a profit before tax of €71.2 million for the year ended on 31 December 2018, after providing for a litigation provision of €75 million. Prof- it before deducting provision thus amounts to €146.2 mil- lion, a 5.8% increase over the annualised result for 2017. Pre-tax return on equity, stated before the litigation provision, was of 14.9% (2017: 16.5%). This same ratio, stated net of tax, amounted to 9.9% per annum, as compared to a ratio of 7.3% for banks in the Euro area. The Group's Core Equity Tier One ratio rose from 16.1% in December 2017 to 18.3%. The business drivers that have led to this result include a sustained demand for credit, especially as regards home loans, but also in corporate and SME lending. Gross advances to custom- ers increased by 3% during the year to reach €4.6 billion. In- come from a number of busi- ness lines, including credit cards and payments, also re- corded satisfactory growth. Customer deposits rose by just over 3% and now amount to €10.4 billion. Total group assets stand at €12.1 billion. BOV Chairman Deo Scerri explained that these strong results were achieved during a period which was highly chal- lenging for the Group. "These challenges ranged from the entry of new play- ers into the financial services industry to compliance with new regulation such as GDPR and MiFID ii, including the necessary IT development and the training of staff". Scerri said that BOV met these challenges by going for growth. He explained that the Group will continue to build on these results by investing in the fu- ture. Group strategy contem- plates, among many other ini- tiatives, heavy investment in IT and in fintechs. Concurrently, BOV will con- tinue to strengthen its capital buffers, and to give strategic priority to strengthening its anti-financial crime and cyber defence mechanisms. The Group has, in the mean- time, continued the restruc- turing of its business model, with the objective of lowering its risk profile. The programme is multi-fac- eted, and includes the wind- ing down of certain business lines, the re-dimensioning of others, the revision of the Risk Appetite Framework, the en- hancement of risk policies and comprehensive training pro- grammes covering the entire organisation from the Board of Directors downwards. As had already been an- nounced, the Board of Direc- tors resolved not to pay out or recommend any cash divi- dend for financial year 2018. In arriving at its decision, the Board took a number of issues into consideration. Foremost among these is the uncertainty arising from a number of legacy litigation cases. This uncertainty led the Board to give top priority to capital conservation, despite its confidence in the robust- ness of its legal position. Capital is the Bank's bulwark against future unexpected losses, and the most efficient way of strengthening capital is to reinvest profit in the busi- ness, rather than paying it out in the form of a dividend. It is always wise to sacrifice short term benefits - in this case, the payment of a cash dividend - in the interest of long term stability. And that is exactly what the Board did when it decided against a cash dividend payout for 2018. In this context, the Board re- solved to make a bonus share issue of one new share for eve- ry 10 shares held. A bonus issue, while not constituting a cash dividend, may also offer some value to shareholders, even in the form of possible tax benefits. It is the intention of the Bank to resume the regular payment of cash dividends as soon as prudent judgment allows, and under guidance from its banking supervisors. "The Bank will always give priority to long term sustain- ability and stability over short term benefits - and this in the interest of all its stakeholders, not least of its shareholders," Scerri said. For further information kindly contact Bank of Val- letta on 2275 9642 or by email on info@bov.com BOV announces results for 2018 BOV Chairman Deo Scerri (centre) presenting the 2018 results MAPFRE MSV Life p.l.c. announced the bonus rates for With Profits Plans for the year ended 31 December 2018. A regular bonus rate of 2.35% was de- clared on the company's core products namely the Comprehensive Flexi Plan (regular and single premium policies), the Single Premium Plan and on the With Profits options of the Invest- ment Bond, Retirement Plan and the Personal Pension Plan. A regular bonus rate of 2.25% was de- clared on the Comprehensive Life Plan (regular and single premium policies) whilst on the 'Old Series' Endowment and Whole Life policies, a Regular Bo- nus of 1.50% of the basic sum assured plus bonuses was declared. In addition, the board also an- nounced the declaration of a final bo- nus in respect of Comprehensive Life Plans (single and regular premium), Comprehensive Flexi Plans (single and regular premium) and Single Premium Plans that have been in force for more than 10 years. The Final Bonus will be paid on claims payable as a result of death or maturity between 5 March 2019 and the next bonus declaration, at a rate of 1.00% for every year in force after the 10th year of the policy. This Final Bonus will be paid on the value of the Policy Account as at the date of death or maturity. The board also approved a regular bonus of 2.25% on those secure growth policies which formed part of the port- folio of business transferred to MAP- FRE MSV Life from Assicurazioni Generali S.p.A. during 2000. Finally the board also approved a regular bonus of 0.85% on the ALICO 78 policies and a regular bonus of 1.10% on the ALICO 66 polices which formed part of the portfolio of busi- ness transferred to MAPFRE MSV Life in 2011 from American Life Insurance Company ("ALICO"). The With Profits Fund stood at €1.89 billion at 31 December 2018 (2017: €1.79 billion). The fund registered a total negative investment return of €43.1 million compared to a positive €63.9 million in 2017. This represents a negative 2.15% (after fees) net invest- ment return compared with a positive 3.85% in 2017. The Chairman of MAPFRE MSV Life, John Cassar White stated, "although the MAPFRE MSV With-Profits Fund is invested in a very diverse portfolio of assets and is underpinned by a rig- orous and prudent investment man- agement process, 2018 was a very dif- ficult and unusual year for long term investors like MAPFRE MSV Life as all major assets classes globally registered negative returns. Rarely have real re- turns been negative across all asset classes in any year and this event hap- pened only twice in the last 25 years. 2018 was also marked by exceptionally volatile equity markets. The S&P 500 plummeted 9.0% in the last month of the year as concerns about recession risk and the future path of interest rate hikes gripped investors − a stark contrast to the growth exuberance that characterized the start of 2018. December's performance dragged the S&P 500 into the red for the year, marking the first negative calendar year for U.S. equities since 2008." MAPFRE MSV Life p.l.c. declares 2018 bonuses It is always wise to sacrifice short term benefits - in this case, the payment of a cash dividend - in the interest of long term stability