Upgraded S&P rating is ‘recognition of BOV’s support for Malta’s economic development,’ says CEO

Bank of Valletta CEO Kenneth Farrugia has welcomed the bank’s improved score by credit rating agency Standard and Poor’s (S&P), calling it “yet another recognition of the bank’s efforts to continue supporting the growth and development of Malta’s economy, while maintaining our commitment to responsible and sustainable banking practices.”

The bank saw its rating being upgraded to a BBB-/A-3 rating with a stable outlook, “underpinned by BOV’s strong performance in operating revenues, resilient profitability, contained credit losses and a strong solvency position,” according to Mr Farrugia.

The CEO stated that “2022 was an extremely positive and productive year for the BOV Group, and the hard work put in by all employees has resulted in increased custom from our customers.

“Our key focus remains centred on the optimisation of our business and operational service model, as we create and deliver value to our customers and other key stakeholders.”

He said he is “confident that all our stakeholders will welcome this improved rating, given from such a major rating agency despite unprecedent circumstances which have affected both the local and international markets, such as the increase in inflation and the high interest rates.”

BOV Chairman Gordon Cordina meanwhile stated that BOV’s upgrade is a “a clear indication that the bank continues to head in the right direction to maintain its leading role within the local financial and economic sectors.

“The projected outlook of the local economy offers the bank great opportunities to enhance its market position, whilst providing added value to our customers with strong risk management and regulatory controls,” he said.

The rating given to BOV by Standard and Poor’s is a clear indication that the bank’s strategy is achieving expected results, which will ultimately further enhance BOV’s reputation as the bank of choice within the local community.”

S&P highlighted that in future evaluation, they would consider a further rating upgrade by one notch, once the bank registers an additional loss-absorbing capacity buffer that comfortably exceeds its four per cent risk-adjusted capital ratio threshold.

The rating also delved into BOV’s expected credit losses as well as projections for Malta’s economy.