Rating raised from BBB-/A-3 to ‘BBB/A-2, with stable outlook
In December 2024, S&P Global Ratings raised its long- and short-term issuer credit ratings on Bank of Valletta to BBB/A-2 from BBB-/A-3. S&P Global Ratings also raised the long-term resolution counterparty rating (RCR) to BBB+ from BBB and affirmed an A-2 short-term RCR. The stable outlook reflects S&P’s view that BOV will maintain an additional loss-absorbing capacity (ALAC) ratio well above 4% of S&P Global Ratings risk-weighted assets (RWAs) metrics over the next two years, while preserving the Bank’s dominant market position in Malta and its strong capitalization.
BOV Chairman Dr Gordon Cordina and CEO Kenneth Farrugia expressed their extreme satisfaction on this announcement. Dr Cordina stated, “This upgrade by S&P Global Ratings is yet another testament to the sustained progress that the Bank has been making. A significant part of our efforts has been directed towards restoring sustained profitability and making the BOV Group secure, for the benefit of our stakeholders, shareholders, and the wider community. This upgrade is recognition of this effort, and a reaffirmation that we are on the right trajectory, giving us the confidence to continue along this transformation journey”.
CEO Kenneth Farrugia echoed Dr Cordina’s comments, crediting this positive announcement to the Bank’s clear strategic direction, its transformation program, commitment to excellence and leadership across its operations. In addition, the drive to ensuring that the Bank maintains a strong capital base has been critical in this positive rating. “This upgrade reflects Bank of Valletta’s strong financial position and validates our strategic vision and ongoing efforts to strengthen the Bank’s capital, which will in turn support the growth of our business in the years ahead of us. The very recent successful closure of the €100 million 5% unsecured subordinated bonds (2029-2034), which was fully subscribed within 2 days of its launch to the market, reflects the public’s overwhelming trust in the Bank. This announcement by S&P Global Ratings closely follows the achievement of Company of the Year 2024 awarded by the Malta Stock Exchange in November, which reaffirms the Bank’s position as a leader in the financial services sector and an advocate for sustainability, integrity, and customer-centric values.”
In the update published by S&P Global Ratings, S&P expect the Bank’s dominant market position and strong capitalization to likely continue supporting business stability in Malta over the next few years. Bank of Valletta, it stated, remains the largest bank in Malta with a very strong market share of around 50% in both commercial loans and customer deposits at end-September 2024. It is also expected that the Bank will continue benefiting from supportive economic conditions, marked by solid economic growth.
