On 18 January, Fitch Ratings confirmed Bank of Valletta plc’s long-term rating at ‘A-‘ with a stable outlook. In its report, Fitch stated that BOV’s rating reflects it conservative management, satisfactory liquidity and healthy capital ratios. Fitch reported that the rating also factors in the Bank’s historically weak asset quality by international standards, although it has been improving in recent years, and its reliance on Malta’s small economy.
Fitch identifies BOV’s main risk to be credit related with asset quality still vulnerable especially due to some concentration on the property sector. Nonetheless, Fitch is of the opinion that the high level of collateral and historically low loan losses compensated for this.
The report also states that BOV’s investment portfolio, which makes up 40% of the Bank’s assets, is of good credit quality and conservatively managed. BOV generally holds the underlying securities to maturity. Moreover BOV’s loan to deposit ratio is at a conservative 68% with adequate capitalisation. In fact, Fitch shows an eligble capital ratio of 13.1%.
The Fitch report also confirms BOV as the largest bank in Malta with a market share of 46% in deposits and 40% in loans.