Moving to the expenditure side, the bank’s total operating expenditure (excluding depreciation and amortisation), amounted higher to €88.7m during H121, implying an overall growth of 11.4 per cent or €9.1m on a comparable basis (H120: €79.6m). Nevertheless, management further noted that the overall business and economic activity is still relatively lower when compared to pre-pandemic levels. Expectedly, this is reflective of the loosing and relaxation of the pandemic induced restrictions, which positively impacted BOV’s commission income, mainly through a pick-up in cards and payments throughout the first half of the year. Notwithstanding the aforementioned improvement, the bank still was impacted by the wavelength of challenges brought about by the pandemic, namely the prolonged current low yielding environment.Īdditionally, BOV also registered an improvement in net fee and commission income during H1-21 (+8.6 per cent). Management further noted that this improvement is mainly attributable to a steady growth in home loans and in corporate loans issued in support of businesses utilising the BOV MDB COVID-19 assist scheme. More specifically, BOV’s net interest income amounted higher during H121 to €73.4m, reflecting an overall improvement in the bank’s interest income of €1.1m or 1.5 per cent on a comparative basis (H120: €72.3m), translating into an overall net interest margin of circa 1.1 per cent. Nevertheless, BOV reported an improved financial performance during H1-21, namely in terms of its interest and non-interest revenue drivers, implying a possible gradual recovery from the implications brought about by the pandemic on the bank. Indeed, the pandemic has accelerated the risk of non-performing loans globally, forcing banks to provide for elevated levels of expected credit losses (ECLs) in their books.
The COVID-19 pandemic has caused an unprecedented global contraction in economic activity, and has inevitably originated a significant shock to the global banking industry.
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