Bank of Valletta was one of around 100 banks in the eurozone chosen by the EU to be assessed for resilience in the face of stressful economic conditions. The original plan was to test 12 major banks in Europe, however market pressure for a wider reading into the banking system led to the widening of this sample to around 100 banks across the eurozone. The stress testing in Europe follows a similar exercise carried out in February 2009 across the majority of US banks.

Criteria for selection required every country in the zone to be included and that at least 50 per cent of the banking sector of each country to be covered. BOV was selected as the only bank in Malta that could fulfill both requirements simultaneously.

The stress testing is being executed for the EU by the Committee of European Banking Supervisors (CEBS). In Malta the exercise is being conducted by the Central Bank and the MFSA. BOV is collaborating closely with these institutions, providing all data that will allow the successful completion of the exercise within the tight timeframe specified by CEBS.

“BOV is entirely confident that it will emerge from the stress testing fully compliant with the Tier 1 levels defined by the ECB. We are very comfortable with the quality of our investment book, holding an excellent spread of top quality assets. Bank of Valletta’s Financial Markets book has stood the test of unparalleled market crises. There is no doubt that the Bank will emerge from a simulated stress scenario with at least six per cent Tier 1 Capital,” stated Mr Chalmers, Chairman of BOV.

Referring to this as a routine exercise carried out by the Bank, Tonio Depasquale, CEO of BOV, stated that, “This is not a surprise or a challenge for BOV. We carry out stress testing as a matter of course and as an integral part of our risk management and Financial Markets portfolio assessment. It forms part of our contingency planning and having it carried out by independent regulators strengthens the authenticity and transparency with which we operate.”

The results of the Europe-wide stress testing will be published on 23 July, making both nation-specific as well as bank-specific data available to the public.