Bank of Valletta has today released its earnings for 2022. It reported higher revenues and profits from its operations as it increased its loan book but the net profit was less than last year due to its voluntary payment settlement of the Deiulemar case. Higher interest rates may have also been of great help to increase revenues. Strangely enough, it did not declare the €36 million Steward loan as an impairment so technically, BOV is saying there is no problem with this loan and its repayments. The bank did not declare a dividend, but this should have been expected – the bank is scandal-ridden and lacks capital to the extent that it had to shore up its reserves with a bond sale. The banking is spending significantly higher amounts on salaries and although the bank pays relatively low salaries compared to what is compared in the industry, the bank is over-staffed due to political nepotism.
I agree with what you are saying however the bond issue is because of MREL you re right when you re saying that the bank needs to increase capital from what I am understanding they issued a complex instrument which is eligible for resolution purposes. In case the bank goes bust those bonds will be converted to equity and the bank does not need to be bailed out by government. It is sort of a way how it can be recapitalised. You re right when you re saying that if better decisions were taken the capital shortfall would be less the credit rating could have been better and the interest rate on these bonds (35 million euro per year (10% per annum) could have been lower and thus shareholder could have been rewarded. The very least the bank should do is offer transparency and give shareholders their fair return.