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News - News Releases 2020

03/09/2020

Solvency of Domestic Banks

Reference is made to the editorial of the Times of Malta of 3 September 2020.

In its press release concerning the latest Financial Stability Report [27 August 2020], the Central Bank states that profitability for banks will come under pressure, as indeed evidenced by the publication of the interim results for 2020 of various domestic banks.

While the Central Bank never comments on individual banks in its Financial Stability Report, or elsewhere, nevertheless the Bank clearly states in its press release that "the Report shows that the resilience of the banking sector has improved and the sector entered the pandemic phase with healthy capital levels and strong liquidity", which provides the necessary reassurance that domestic banks are solvent. The solvency of the banking sector is further reaffirmed by stress tests carried out by the Bank and presented in the said Report. The strong liquid position of domestic banks also reflects the trust that depositors have in the solvency of banks. 

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