Maltese banks pass European stress test

Bank of Valletta has passed a comprehensive assessment following a year-long examination of the resilience and positions of the 130 largest banks in the eurozone carried out by the European Central Bank.

In a statement, BOV said that the assessment consisted of an asset quality review that assessed the adequacy of banks’ asset valuation, classification of non-performing exposures, collateral and provisioning; and a stress test, which evaluated the resilience of banks' balance sheets to stress scenarios. The stress test was performed in close cooperation with the European Banking Authority.

"This result will serve to boost market confidence in the strength and stability not only of BOV, but of the entire Maltese financial system," BOV chairman John Cassar White said.

“BOV will continue to be vigilant in the management of risks and will strengthen its corporate governance to ensure that it continues to perform its role in a sustainable and effective way.”

The results were positive for the Maltese subsidiaries of international banks HSBC and Deutsche Bank as well.

“The comprehensive assessment identified no capital shortfalls, both in the baseline and adverse scenarios, for Bank of Valletta plc, HSBC Bank Malta plc, and Deutsche Bank (Malta) Ltd,” the Malta Finance Services Authority said in a statement. “The overall results confirm the soundness and resilience of each of these three banks.”  

Prime Minister Joseph Muscat praised the banks’ performances in a short tweet.

On the other hand, the same report found that 25 banks in the euro zone, including nine in Italy and three in Greece, showed shortfalls  in their own capital.