Fitch Ratings has affirmed Bank of Valletta’s long-term issuer default rating at ‘A-’ with a stable outlook.

Fitch simultaneously affirmed BOV’s short-term IDR at ‘F2′, Individual Rating at ‘C’, Support Rating at ‘2′ and Support Rating Floor at ‘BBB+’.  Fitch said that the ratings reflected BOV’s conservative management, satisfactory liquidity and healthy capital ratios. They also factor in the bank’s historically weak asset quality by international standards, which has nonetheless improved in recent years, and its reliance on Malta’s small economy.

BoV’s main risk is credit-related. Asset quality remains vulnerable, with some concentration in the housing/real estate sector. However, in Fitch’s opinion the high level of collateral and historically low loan losses compensated for this.

BoV’s investment portfolio (40% of assets at FYE09) is of good credit quality and conservatively managed. The bank typically retains its securities portfolio until maturity.

Loan-to-deposit ratios are kept at conservative levels (68% at FYE09) and capitalisation is adequate, with a Fitch eligible capital ratio of 13.1% at FYE09.

BOV is the largest bank in Malta, with market shares of about 46 per cent and 40 per cent in deposits and loans, respectively.

extract from editorial@di-ve.com Business & Finance