BOV sees no stress in EU test

Bank of Valletta is confident it will pass the European Union stress test for banking institutions very comfortably, chairman Roderick Chalmers said this afternoon.

“The stress tests are taking place right across the bank’s balance sheet – the banking book and the financial markets holdings. We are entirely confident that we will emerge from these stress tests very comfortably, meeting the Tier I capital criteria,” Mr Chalmers said.

Bank of Valletta is among 91 European banks listed by the Committee of the European Banking Supervisors yesterday. The list, which also includes banking groups like BNP Paribas, HSBC, Deutsche Bank, Santander, UniCredit and ING, makes up 65 per cent of the European banking sector.

The stress tests aim to assess the overall resilience of the EU banking sector and the banks’ ability to absorb further possible shocks on credit and market risks, including sovereign risks, and to asses the current dependence on public support measures.

Tests are conducted on a bank-by-bank basis using macro-economic scenarios, including GDP, unemployment and consumer price index variables for this year and next year. The scenarios were developed in close collaboration with the European Central Bank and the European Commission.

In each member state, the sample covers at least 50 per cent of the national banking sector in terms of total assets.

Bank of Valletta will be tested by the Central Bank of Malta, in collaboration with the Malta Financial Services Authority, to which data has already been submitted.