Moody's gives BOV a D+ rating

Moody's has assigned a D+ financial strength rating (BFSR) to Bank of Valletta which translates into a Baseline Credit Assessment of Baa3.

The rating is supported by the bank's dominant domestic franchise in Malta, bolstered by a solid retail profile, as well as its adequate financial fundamentals buttressed by the good performance of the local economy in recent years, Moody's said.

The rating also reflects key constraints including: (i) the bank's lack of core-business geographic diversification; (ii) its high single-party exposures; (iii) the material market risk arising from the bank's large securities (mainly fixed-income) portfolio and sectoral concentration to financial institutions; and (iv) the credit portfolio's high sensitivity to the performance of the local economy and the need for a further increase in loan loss provision cover, Moody's added.