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maltatoday WEDNESDAY 14 MARCH 2018 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Lombard Bank Malta p.l.c. financial statements Lombard Bank Malta p.l.c. an- nounced last week that Group Profit After Tax increased by 7.0% to €5.7 million. This was achieved despite persis- tent low interest rates and higher regulatory and compli- ance costs. The Group's busi- ness outlook remained posi- tive throughout the year with new initiatives gaining mo- mentum in a favourable do- mestic economic environment. As already reported in a previ- ous announcement, the Bank's comparative 2016 result in- cluded a significant one-off gain of €1.29 million on the disposal of its membership in- terest in Visa Europe Limited. Net Interest Income at €15.43 million rose by 9% both as a result of increased customer lending and also because of consistently prudent management of the Bank's treasury activity. Net Fee and Commission Income at €4.13 million increased by 9% as a result of a higher volume in transaction banking. Postal Sales and Other Revenues rose by 40% to €37.37 million. MaltaPost continued to experience a decline in Letter Mail volumes, which was, however, significantly offset by growth in ecommerce traffic as well as positive trends recorded in a number of other services. Group Employee Compensation and Benefits increased by 12.6% to €19.95 million from €17.72 million in 2016 while Other Operating Costs rose by 59.8% to €24.70 million, mainly reflecting costs associated with the increased revenue in Postal Sales and Other Revenues, but also as a result of higher compliance and regulation costs. Other relevant cost items relate to the Group's investment in IT and automated services introduced to provide an enhanced customer experience. The Bank's Cost Efficiency Ratio was higher at 51.4% (FY 2016: 46.8%). That of the Group stood at 79.6% (FY 2016: 73.2%) reflecting the characteristics of the postal services industry where business is high volume yet low margin and human resource intensive. Total Impairment Allowances for the Bank rose by €2.83 million in 2017, compared to an increase of €4.03 million in 2016. For individually assessed exposures the Bank continued to focus on "Non-Performing Exposures", that is, mainly those where repayments fall in arrears by 90 days or more. The Bank remained prudent in quantifying the level of Impairment Allowances. The level of customer deposits at €733.15 million was €11.59 million above the previous year though the Bank was mindful of the cost associated with holding excess liquidity in a money market charging negative interest rates. Loans and Advances to Customers increased by 24.8% to €428.61 million from €343.49 million in 2016, evidence of the Bank's commitment to support the economy at both a business level as well as in terms of personal finance. Group Total Assets as at 31 December 2017 increased to €882.75 million (2016: €862.73 million), while Equity Attributable to Equity Holders of the Bank grew by a further 2.5% to €96.14 million. Group Net Asset Value (NAV) per share stood at €2.18 (2016: €2.12). Group Earnings per Share (EPS) increased by 0.9 cents to 11.6 cents. Group Return on Assets (ROA) rose to 0.65% (2016: 0.62%) while Group Post Tax Return on Equity (ROE) was 5.4% (2016: 5.2%). Common Equity Tier 1 (CET1) Ratio of 14.1% on a CRD IV basis stood over three times the minimum requirement of 4.5%, while Total Capital Ratio stood at 14.3%, well over the minimum 8% requirement. Advances to Deposits Ratio stood at 58.5% compared to 47.6% at the start of the year reflecting the Bank's strong liquidity and prudent management of its credit exposures. Excess funds continued to be placed only with reputable counterparty banks and in Malta Government Treasury Bills. The Bank held no exposure to foreign sovereign or corporate bonds. The Group's achievement reflected in these results is evidence of its strength and ability to expand its business within a challenging environment while at the same time continuing to deliver a high quality service to customers. The difficult operating environment is expected to persist at least in the short term. Nevertheless the Group is confident that its business model and strategies coupled with a robust operating structure make it well positioned to continue maximising opportunities leading to further increases in stakeholder value. • Group Profi t Before Tax rose by 7.7% to €8.87 million compared to €8.24 million in 2016. • Profi t Attributable to Equity Holders of the Bank was €5.13 million, or 8.5% above that in the previous year. • Bank Cost Effi ciency Ratio increased to 51.4% (Group: 79.6%) from 46.8% (Group: 73.2%) in 2016. • Net Loans and Advances to Customers increased by 24.8% to €428.61 million from €343.49 million in 2016. • Customer Deposits were up by 1.6% and reached €733.15 million, an increase of €11.59 million over the previous year. • Group Post Tax Return on Equity for 2017 was 5.4%, up from 5.2%. • Group Total Assets rose to €882.75 million (€862.73 million in 2016). • Total Capital Ratio at 14.3% and Common Equity Tier 1 (CET1) Ratio at 14.1% were both well over minimum regulatory requirements.