Lombard Bank directors want citizenship fund to sell 49% shareholding to public

Shares held in Lombard Bank by the fund financed by the sale of citizenship should be sold to the public, the bank’s board of directors believes.

The announcement was made by Lombard chairman Michael Bonello in the annual report for 2018 released on Monday.

“The board believes that it would be in the best interests of all stakeholders if the shares were to be widely spread among the public as this would ensure that the bank remained focused on serving the Maltese economy in the long-term,” Bonello wrote in his introduction.

The National Development and Social Fund, a sovereign fund financed by proceeds from the Individual Investor Programme, a scheme selling Maltese citizenship to wealthy foreigners, bought the 49% shareholding held by Cyprus Popular Bank. The share purchase was finalised in August 2018.

In March 2013, Cyprus Popular Bank was placed in resolution, kicking off a process to dispose of certain assets including its shareholding in Lombard Bank.

In November last year, the NDSF, which became the largest shareholder in Lombard, said it had no interest in increasing its stake in the bank and would not influence the institution’s direction. It also reiterated its commitment to sell the shareholding when the market conditions are right.

Lombard shares are traded on the Malta Stock Exchange. The annual report shows that Lombard has 1,413 shareholders, who hold 44,177,914 shares.

There 680 stakeholders with 5,001 shares and over, while 152 shareholders hold between one and 500 shares.

The Lombard Group recorded a pre-tax profit of €13.8 million. The main driver was the performance of Lombard Bank Malta p.l.c., since MaltaPost p.l.c., the other member of the group, registered a small decline in profitability.

The outcome of the bank’s operations during 2018 was an increase in the profit before tax to €12.6 million. This prompted the board to recommend a gross dividend of 5c per share.