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News - Media Releases 2018

01/08/2018 20:30:00

S&P Banking Industry Risk Score

With reference to the publication, dated 1 August 2018, of the S&P Banking Industry Risk score, essentially based on the rating of Bank of Valletta, the Central Bank of Malta would like to assert that the local banking sector remains sound, resilient, profitable, and enjoys ample liquidity. The quality of assets of the core domestic banks continued to improve, with non-performing loans falling to a historic low and below the euro area average. Small international banks, like Pilatus Bank, do not pose any systemic risk on domestic financial stability.

The business model of core domestic banks fundamentally remains that of channelling retail deposits to resident lending and to investment in low risk securities. The banking sector, in particular core domestic banks, has already been undergoing a rigorous de-risking process, which is set to continue and hence mitigate further any perceived reputational risk. As already announced by the bank, BOV is addressing legacy litigation risks through a number of measures which should continue to safeguard depositors and maintain its future profitability on a sustainable path.

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