Bank of Valletta passes stress test with strong capitalisation

The European Banking Authority's report on the level of capitalisation of European Banks shows Bank of Valletta enjoying a strong Core Equity Tier 1 ratio of 10.6%, which is significantly above the minimum of 9% required by European regulation.

Core Equity Tier 1 ratio is the most commonly used measure of the adequacy of bank capital. It relates shareholder capital to risk-weighted assets.

In a company statement, BOV said the capital strength of the bank was the result of the strategic priority the group gave to capital management to secure the sustainability of both the group and of the Maltese financial system in the long term.

"As the largest local financial services provider, Bank of Valletta participates regularly in stress tests conducted by the EBA, the Malta Financial Services Authority and the Central Bank of Malta. Stress tests and capital forecasting are carried out at the bank on a regular basis, as a central part of the bank's risk management process. Capital buffers are also monitored continuously by the board and executive management," the bank said.