BOV among EU’s‘soundest’ banks
Bank of Valletta is expected to be amongst the ‘soundest’ among 91 EU banks that have undergone a stress test by the European Banking Authority (EBA).
The results of the stress tests are to be published next Friday, but finance ministers attending yesterday’s Ecofin meeting in Brussels have been given a preview of the results.
Speaking to MaltaToday, Finance Minister Tonio Fenech did not reveal the result, however he hinted that the result for BOV is “more than satisfactory.”
Contacted last night, senior BOV officials said that the EBA stress test report is expect to show that the bank is among the “soundest” within the EU. HSBC was tested on an international level and not on its local representation.
The test was carried out to assess the resilience of European banks to a hypothetical adverse scenario on a static balance sheet (as of December 2010), over a two-year time horizon.
Key features of the 2011 test include a new consistent capital benchmark of 5% core tier 1, and include clear disclosure of sovereign exposures.
The impact of existing mitigating measures which will strengthen the capital base at 2012 as a result of committed equity raisings and mandatory restructuring plans, announced and fully committed by 30th April 2011.
Management decisions and actions where necessary to strengthen balance sheets and additional mitigating measures which will serve to improve the capital position by end 2012.
The EBA will also publish relevant backstop measures for banks falling below the test threshold, and firms that may be deemed to be at risk.