Fitch Affirms BOV Credit Rating at BBB, with negative outlook

Fitch Ratings yesterday affirmed the long term credit rating of Bank of Valletta at BBB. The rating agency assessed outlook as ‘negative’, in view of “risks from persisting operational risk headwinds and from the bank’s uncertain ability to strengthen its risk governance in a timely and effective manner”.

Fitch would revise the outlook to ‘stable’ if the bank “makes visible progress in strengthening its risk controls without materially eroding profitability”.

The rating agency commented positively on BOV’s “adequate capitalisation and stable funding and liquidity”, on its “stable and ample customer deposit base” and on its “satisfactory asset quality”, which has benefitted from the positive momentum of the Maltese economy. The bank also benefits from its strong domestic franchise in Malta.

BOV CEO Mario Mallia expressed satisfaction at the confirmation of the Bank’s credit rating, and stated that the Bank’s two-year transformation programme will address the issues raised by Fitch in their rating decision.

“Our transformation programme, which is now in full swing, addresses risk governance, business de-risking and anti-money laundering issues. There is no gain without pain, and we will inevitably experiences pressures on profitability for the duration of the programme. But our ultimate goal remains always the long term stability and sustainability of the institution, for the benefit of all stakeholders and of the country in general.”