Bank of Valletta’s underlying business performed slightly better during the first half of 2026 compared with the same period last year, although higher costs, impairment charges and weaker trading results pushed its final profit lower.
The bank announced a profit before tax of €119.8 million for the first six months of 2026, down by €15.3 million, or 11.3%, from €135.1 million in the first half of 2025. Profit after tax declined from €89.5 million to €79 million, while earnings per share fell from €0.139 to €0.123.
Despite the lower profit, the bank’s core income continued to grow. Net interest income increased by 9.7%, from €188.7 million to €207 million, following an expansion in customer lending and further investment in its treasury portfolio. Total operating income increased by approximately 3%, from €244 million to €251.3 million.
This indicates that BOV’s underlying banking operations performed slightly better than in the first half of last year. However, the increase in income was outpaced by rising expenditure.
Operating costs increased by 10.5%, from €116.9 million to €129.2 million. Employee compensation and benefits rose from €68.6 million to €74.2 million, while general administrative expenses increased from €38.1 million to €44.2 million. The bank’s cost-to-income ratio consequently deteriorated from 47.9% to 51.4%.
The difference in profitability was also affected by a €5.7 million impairment charge. During the first half of last year, the bank had instead recorded a €3.3 million impairment reversal, resulting in a negative year-on-year swing of almost €9 million. Trading profits also declined from €8.5 million to €2.7 million, while the previous year’s results included a one-off income item of €6.4 million that was not repeated this year.
BOV’s balance sheet has continued to grow substantially. Total assets increased from €15.9 billion in June 2025 to €17.6 billion in June 2026, representing growth of approximately 10.8%. Customer deposits rose from €13.1 billion to €14.5 billion, while loans and advances to customers increased from €7.4 billion to more than €8.5 billion.
The bank’s treasury portfolio has now reached approximately €7 billion and represents around 40% of its total balance sheet. This portfolio is composed predominantly of local and foreign government continues to provide BOV with a substantial source of interest income.
The quality of BOV’s loan book also improved. Its non-performing exposure ratio declined from 2.3% in June 2025 to 1.49% in June 2026, while it continued expanding its lending portfolio.
The bank remains highly capitalised and liquid, although its ratios are lower than those reported in June last year. Its CET1 capital ratio stood at 19.32%, before including the first-half profit, compared with 21.3% in June 2025. Its liquidity coverage ratio declined from 441.4% to 409.3%, but remains far above the minimum regulatory requirement.
BOV also declared an interim gross dividend of €51.6 million, equivalent to €0.0805 per share. This is lower than last year’s €55 million dividend of €0.0856 per share. The net dividend will amount to €33.6 million, representing 42.5% of the bank’s profit after tax.
The bank has also continued its share-buyback programme, purchasing a total of 985,963 shares at a weighted average price of €1.98 per share and spending approximately €1.9 million.
BOV expects to end 2026 with a profit before tax of between €215 million and €250 million and a pre-tax return on average equity above 15%. Its first-half results remain broadly in line with this guidance.
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