Within the climate of constant change, the challenge for an organisation is to maintain or improve competitive advantage while change continues. This creates the need to monitor the changing environment and ensure that any changes imposed by external factors can be implemented smoothly and any opportunities to improve performance are exploited in the most effective manner.

This was stated by Tonio Depasquale, chief executive officer of Bank of Valletta when he addressed a conference on Security and Risk Management organised by EMCS Ltd.

Mr Depasquale said that it is universally accepted that while regulatory capital is the bedrock for the stability of the banking sector, the use of capital can never act as a substitute for rigorous risk management. Capital is not a means to avoid adversities in the first place and it offers no assistance in learning lessons from events. Mr Depasquale announced that “Bank of Valletta has been very proactive in instilling the appropriate risk philosophy across the entire organisation. Without doubt, creating shareholder value is one of the over-riding business objectives of the Bank of Valletta Group. Risk is an integral component and driver of Bank of Valletta’s success in achieving this business objective. One does not, therefore, look to avoid risk or shy away from it, but rather, understand it, embrace it, measure it and manage it effectively. Hence, the strengthening of an enterprise-wide risk management structure through a three-tiered model (credit, operational, and market risk) is one of the strategic directions that Bank of Valletta has embarked upon”.

He said that the Bank’s strategy reflects a number of countermeasures to anticipate and manage strategic threats systematically in areas related to the industry, technology, competitors, customers and stagnation and in the process, turn some of them into growth opportunities. “This can be evidenced from the Bank’s strides despite facing a margin squeeze, stiffer competition, deregulation, increasing customer power and ever-changing shifts in technology,” added Mr Depasquale.

Speaking about the upcoming conversion to the euro, Mr Depasquale said that this can be described as another strategic threat where the bank is likely to see some loss of revenue in currency transactions in the short-term, and with the likelihood that foreign credit institutions would target major Maltese companies for some of their borrowing needs. “However this is another example where BOV is positioning itself as a risk shaper that is both more aggressive and more prudent in pursuing new growth resulting from the euro conversion. We are confident that our strategy will enable us to take full advantage of the opportunities that the adoption of the euro will bring with it,” concluded Mr Depasquale