On 15 July, the European Banking Authority (EBA) published the results of the stress tests carried out on 90 European banks including Bank of Valletta plc which was chosen to participate in such tests for the second time as it is the largest banking Group in Malta.
BOV issued an announcement stating that the results released by the EBA on the stress tests revealed that the Bank comfortably 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 EBA and the European Central Bank (ECB), BOV’s Tier 1 Ratio (an indicator of balance sheet strength), decreased by just 0.1% percentage points from 10.5% to 10.4%. This is more than double both the 5% “pass mark” set for this exercise and the statutory minimum ratio of 4%.
The Board of Directors of the Bank commented that the “outcome of the stress test was a good result for BOV and represented the latest external confirmation and endorsement of the strength and resilience of BOV and its balance sheet, even under extreme conditions”. Furthermore, the Board noted that both last year and this year, the Bank passed the stress test with relative comfort given the Bank’s prudent capital management, cautious risk appetite and the adoption of a responsible and sustainable dividend payout policy.
In conclusion, the Board also noted that stress testing on the Bank’s capital and liquidity buffers are a regular part of the Bank’s internal risk management process.
Download a copy of the Bank Valletta plc’s Detailed 2011 Stress Test Results