“The results of the comprehensive assessment exercise conducted by the European Central Bank (ECB) on 130 banks located in 19 Member States reconfirmed the soundness and robustness of Malta’s banking sector,” said the Minister for Finance, Prof. Edward Scicluna.
Minister Scicluna welcomed the results of the exercise as conducted by the ECB in conjunction with the national competent authorities responsible for banking supervision in these Member States, and also involving the European Banking Authority (EBA). The results were announced by the ECB on Sunday 26th October 2014.
The comprehensive assessment consisted of two components, namely an asset quality review (AQR) on the basis of a methodology designed and published by the ECB, to be followed by a stress test based on a methodology designed and published by the EBA.
The comprehensive assessment was conducted on three credit institutions licensed by the Malta Financial Services Authority (MFSA). These were Bank of Valletta plc, HSBC Bank Malta plc, and Deutsche Bank (Malta) Ltd.
“The results confirm the soundness and resilience of each of these three banks as the capital ratio of each of these banks remained above the 8% minimum threshold after the Asset Quality Review,” Prof. Scicluna noted with satisfaction.
Prof. Scicluna also welcomed how the results of the stress test confirmed that under the adverse scenario and including the full impact of the AQR, that by 2016 the capital ratio for the banks still remained above the 5.5% established minimum threshold.
“The positive performance registered by Malta’s local banks will not only strengthen public confidence in the banking sector, but also facilitate more lending across all sectors of the economy, helping further economic growth,” Prof. Scicluna said.
27th October 2014