BOV makes €20.6 million pre-tax profit in third quarter

For the whole nine months, BOV registered a €46.5m profit before tax

BOV Group registered €20.6 million in profit before tax during the third quarter of 2021.

Covering the first nine months of the year, the bank delivered a €46.5 million profit before tax. This is up by €5.9 million compared to the same period in 2020.

Revenues is also up by 4% compared to 2020, with €172.1 million registered. The bank attributed this to improved volumes in the retain sector, particularly in home lending, cards, and payments.

Net loans and advances to customers increased by 5% during the first nine months of the year. The bank noted growth in both business and home loans, with the latter being the biggest driver.

At the press conference announcing the results, chief executive officer Rick Hunkin said card and payment transaction levels have continued to rise. People are moving to more electronic banking means, and there has been a reduction in cheque usage.

Izabela Banas, the bank’s chief financial officer, noted a decline in the BOV MDB COVID-19 Assist loans. Meanwhile, the bank’s clients are investing in construction and transportation.

The bank recorded a net impairment reversal of €3 million in the third quarter, reflecting a more positive economic outlook that in turn affected the expected performance of specific sectors as well as individually significant exposures.

However, the bank still factored in an impairment charge of €1.8 million with respect to long outstanding non-performing loans.

While interest rates remain low, Banas said that increases are on the horizon. However, there have been no changes within the Eurozone.

The bank also saw a reduction in international clients, which Banas said is in line with BOV’s risk appetite.

Fraud refunds cost bank €1.2 million

Operating costs were 1% higher in the first nine months of the year compared to 2020.

Part of the 1% increase in operating costs was driven by refunds to customers targeted in fraud scams.

In fact, the entire cost of these refunds amounted to €1.2 million.

Police issued several warnings over the year on fraudulent phone calls and text messages. In just 24 hours in June, scammers were able to rob over €50,000 from 40 victims.  

In these scams, criminals use domestic entities, such as the postal service or banks, to send fake warnings that redirect victims to a fraudulent link.

Here, the victim is asked to provide their credit card details. The data provided is then used by scammers to withdraw cash amounts from personal bank accounts.

At the start of the COVID-19 pandemic, the Financial Action Task Force (FATF) had warned that criminals are taking advantage of the pandemic to carry out financial fraud and exploitation scams.

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