BOV gets BBB+ rating from S&P

S&P Global Ratings have assigned a BBB+/A-2 long- and short-term credit rating to Bank of Valletta. The outlook is 'stable'.

"Our ratings on BOV reflect our view that the bank will maintain its dominant domestic market position and sound retail franchise, which enable it to access an ample, stable customer deposit funding base," the agency said.

"The ratings also factor in our expectation that the bank will continue to reduce its stock of non-performing assets (NPAs) through a combination of write-offs, good-quality new lending, and improving recovery rates, while maintaining its recently enhanced capitalization. These strengths counterbalance BOV's lack of geographic and business diversification compared with its international peers, in our view."

The agency said it expects Malta's economy will expand by about 4% a year on average in 2017-2019, well above the average of other eurozone countries. Such favourable economic conditions would support banks' growing lending activity and should help banks to gradually reduce their NPAs and credit losses.

"However, the rapid increase in property market prices, coupled with banks' significant exposure to the real estate sector, could...