Bank of Valletta plc - Passed stress test

On 23 July, Bank of Valletta plc announced that the results released by the Committee of European Banking Supervisors (CEBS) on the stress tests carried out on 91 European banks revealed that the Bank passed the test as it enjoys strong capital buffers. The announcement explains that when the balance sheet and income statement of BOV were stressed in accordance with the parameters set by the CEBS and European Central Bank (ECB), BOV’s Tier 1 ratio, an indicator of balance sheet strength, decreased by 1.2 percentage points to 9.3%. This is one and a half times higher than the 6% “pass mark” set for this exercise and more than double the statutory minimum ratio of 4%.

BOV’s Chairman Mr Roderick Chalmers stated that these results confirm that BOV is a well-capitalised bank by all international standards with enough buffers to survive through situations of stress. The Chairman further commented that this is the direct result of the quality of the Bank’s assets and the prudent dividend policy which over the years sought a balance between capital conservation and attractive dividend return for shareholders. Mr Chalmers reiterated that the bank performs these stress tests on a continuous basis as part of its risk management process since “Capital is the motor which drives the Bank’s business and the prudent and efficient management of capital is one of our top priorities.”

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