S&P Global Ratings lowered the long-term issuer credit rating of Bank of Valletta while it reaffirmed the Bank’s short-term rating. The new long-term rating is ‘BBB’ while the short term rating is ‘A-2’. The outlook remains negative.
The downgrade reflects the rating agency’s assessment of increased pressure on the jurisdiction’s reputation.
The negative outlook on BOV’s rating reflects S&P’s view of the possible negative impact of legacy litigation cases on the Bank.
S&P highlights that BOV’s resilient profitability and improved asset quality ensures that the Bank will maintain adequate risk-adjusted capital in the medium-term. Also, S&P believes that there is no evidence of any immediate deterioration of the Bank’s franchise following the issue of the sequestro conservativo related to the Deiulemar trust case.
The Bank’s CEO Mario Mallia reiterated the commitment towards the long-term stability and sustainability of the Group through the build-up of strong capital buffers and other measures related to the on-going process of de-risking.